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Audi and BMW:
A Tale of Two Brand Identities

November 26, 2012 by Matt

Audi BMW Corporate Logos

Over the past 14 years, the brand perception of these two German luxury automakers have followed decidedly different trajectories.

Note that I’m not talking about corporate profitability. Even as I make the case that Audi’s efforts at building and consolidating their brand image have far outstripped BMW’s, the latter remains a thoroughly successful company. I intend to focus more on brand perception, especially among nominally impartial enthusiasts like myself.

14 years ago, BMW was on a tear. Their primary lineup consisted of the E36 3-series, the sports sedan benchmark at the pinnacle of its development, the beautiful E39 5-series, arguably the best 5-series generation yet made, and the E38 7-series, a bold and powerful player in the high-end luxury sedan market. BMW’s offerings were built on the automaker’s core philosophy of RWD, highly-tuned non-turbo engines and a focus on driver involvement. Most significantly, BMW’s lineup was relatively small, and again, rested upon the automaker’s non-negotiables.

Audi, for its part, was still finding its footing, particularly in the US market. As Peter De Lorenzo summarizes in his excellent commentary on Audi’s most recent Le Mans triumph:

Audi was a perennial “second-tier” brand behind BMW, Mercedes-Benz and Lexus in the U.S. market, struggling to break out of the continuing funk that was the direct result of the hatchet-job performed by “60 Minutes” twelve long years before that (November 1986). The totally erroneous report by the CBS news program, which accused Audi of building vehicles that suffered from unintended acceleration, nearly put the brand out of business in this country – even though it was proven to be completely false – and it lingered over the car company like a shroud of negativity.

De Lorenzo points out that the Audi’s cars were fundamentally solid, if a step behind BMW’s in terms of enthusiast appeal, but the automaker’s brand perception needed rehabilitation.

Audi set about that task in a consistent, disciplined manner, focusing on appealing design, effectively applying technology developed through the automaker’s racing efforts to their production lineup, and most importantly, making intelligent product decisions and not overextending themselves into markets out of sync with the company’s brand focus. As a result, De Lorenzo writes:

Audi is now the forward thinking brand firmly ensconced at the head table of the luxury-performance segment. Boasting technically advanced and beautifully purposeful machines inside and out, Audi production cars bristle with brilliant, innovative ideas and are executed with a relentless precision. And they are beautiful to look at as well.

Meanwhile, from an enthusiast standpoint, BMW has squandered their carefully crafted brand image with an ill-fated foray into Formula 1, as well as dubious product decisions. Among others, they released the hideous Chris Bangle-designed E65 7-series, the frumpy X3 small SUV, the confusing X6 crossover and its downright baffling performance variant the X6 M, and the awkward 5-series GT midsize hatchback. The Bavarian automaker’s market experiments with alternative propulsion have been less than confident, the excellent 335d diesel-powered sports sedan notwithstanding. And BMW has suffered a succession of comparison test losses to its rival from Ingolstadt (A6 vs. 535i and S6 vs. M5) along with a shocking victory by the new Cadillac (!) ATS over the new F30 3-series in the key categories of chassis design and handling.

BMW’s performance benchmark the M3 is still a world-beater, demonstrating that in essentials, the automaker is still as good as it ever was, but the singular drive necessary to develop the M3 doesn’t seem to maintain itself throughout BMW’s lineup, and the brand is weakened. There’s expanding into untapped markets, and then there’s unfocused quasi-desperation, a quality BMW seems to be radiating of late. In the final analysis, as we look forward to 2013, BMW is offering less and less for enthusiasts to get excited about, and Audi’s lineup contains more and more.

The obvious response comes: Why should the corporate bean-counters at the helm of either company care what enthusiasts think? They run businesses, and if there are new opportunities, why not tap into them, brand history and consistency be damned? While that line of thinking has merit, consider the significance of branding to luxury and performance automakers in particular: In order to maintain brand image, a kind of above-the-fray certainty about product decisions must come through. A luxury or performance vehicle should sell itself, to a degree; its brand should shape popular trends, not chase them. In other words, it’s counterintuitive, but too much marketing is a sign customers aren’t beating a path to your door; they aren’t seeking you out like they should. And if nothing else, certainty was a quality BMWs exuded from their arrival here in the US market in the mid-’60s all the way through to the turn of the century. That confidence, coupled with a focus on capturing the enthusiast market, vaulted the automaker to its current place of prominence, and ever since 2000 or so BMW seems to be simply coasting on its brand capital while exploring every new market niche under the sun. No, the majority of its customers may not be enthusiasts, but many of them appreciate the opinions of enthusiasts when it comes to choosing a quality car; this is what drove the yuppie obsession with BMWs 30 years ago, and is important, I believe, for the brand’s continued appeal in the larger market. BMW needs to maintain its position as the enthusiast’s choice of luxury cars in order to sustain its brand image, and they simply cannot do that by exploring every last untapped market niche, as they seem intent on doing.

If the BMW emblem is to remain a beacon to car buffs like myself, the automaker needs to take a page from Audi’s playbook for the last 14 years: Recognize the brand’s traditional strengths and focus like a laser beam on those qualities while expanding the product line within that context, rather than distorting it out of all recognition.

Filed under: Audi, BMW, Car Industry

10 Comments

  1. Michael B. says:

    I agree that BMW has lost its way. I am no longer excited by their new cars. How sad is it that I was so excited to go see a new Scion that I went into the dealer when they were open (something I never do). The last good year for BMW was 2001, IMO. Outside of the 1er (which is $5k+ to much), I haven’t been excited for a new BMW in a decade.I like the Z3 and the 1st gen X5 was okay but confusing. Why not go E39 540iT?

    I just don’t get why automakers can’t do cheap (under $25k) fun cars more. I guess that is not what is profitable.

    • Matt says:

      Agreed, the 1-series is about the only model I’d be interested in as well. The oft-repeated adage that BMW should just add “2” to each series number (3-series becomes the 5-series, 5-series becomes 7-series, etc) holds water…

  2. Phillip says:

    I currently own an E39 540i with the 6spd manual and honestly I have yet to drive anything like it. Granted its now 12yrs old and with only 63,xxx miles its still up todate with most cars on the road today. One thing that I see is that BMW’s are getting too soft, my e39 is now the size of the 3 series… seems like BMW is getting into its American swing of things and getting bloated. They should go back to making cars they seemed fit not cars for everyone. My E39 has sport seats with tall bolsters that hold me somewhat tight… (Im only 5’11 at 145 lbs) this car feels like it was designed for the corners even for its size, but friends that are lets say dine at the finest cuizine restuarant McDonalds a little too much hate my car because they simply dont fit…. I wish we could go back to the E28 5series or even the E30’s size, that would be a great throw back and would really bring a lot more enthusiasts back to the Roundel. Lets face it no one wants to through a limo into a nice hairpin turn on a mountain road… there is no telling what horridness would happen.

    • Matt says:

      The 540i/6 (both E34 and E39) is one of the greats. The F10 (current 5-series generation) looks, and probably is, absolutely massive in comparison. There’s so much bloat, whether from customer “demands” or government regulations that the car is almost unrecognizable compared to what it used to be.

  3. John D says:

    Great writeup. You do a great job researching and writing these automotive tidbits. Really gives me my automotive fix for the day.

    I’ve never really been into the European car scene, but I do recall that Audi was never really on my radar at all until you bought that one in Chapel Hill. Even then they were kind of the oddball. But they have become one of my favorite brands, ever since I drove Fuller’s Stage 2 S4 (2001 or 2003?) for a weekend. Very smooth and refined, surefooted and nimble. Not the power delivery that I was used to or wanted, but it grew on me. And the interior…one of my favorites as well. And they’ve only gotten better since then…

    I never really liked BMW simply because they were so popular and common (at least in Chapel Hill/Raleigh). They do have some great cars, but as far as I’m concerned they were never a good value. The good ones were always crazy expensive and the “cheap” ones were never anything I was interested in. For the money there is always something else out there I would rather have…

    • Matt says:

      Thanks John. I miss that my old 4000 quattro. It was what I owned during the bulk of our mutual car adventures.

      Part of what makes Audi appealing to me in particular (and I know this isn’t as big of a factor for you) is the somewhat non-conformist nature of the brand. But if their success leads them to be the “new normal,” they’ll lose some of that non-conformist cred. Then I’ll be in a bit of a bind. :)

  4. Audi is clearly in their element right now and making better-looking cars than BMW, inside and out, but I find their reputation for understeer and inferior (to BMW) driving dynamics so hard to shake off. The automotive press has saddled them with this burden (although the press might argue that Audi has saddled itself with understeering cars), and what can I say — true or false, it has stuck.

    • Matt says:

      It is difficult. In all my longing for an Audi of whatever kind, it’s always in the back of my mind that I’d be giving up some of my BMW’s beloved dynamics. It’s to the automotive press’ credit that they’ve called out Audis for their shortcomings and (for the most part) done a good job of explaining exactly what the problem is. They’ve held Audi’s feet to the fire, and the company has listened, introducing balance-changing improvements like aluminum front fenders and subframes, shorter engines (V6 vs. the traditional I5), and even performed some pretty amazing mechanical wizardry to move the engine farther back in the chassis:

      http://www.spannerhead.com/2011/06/30/on-the-significance-of-six-inches/

      The irony of being less traditionally locked-in than BMW to the RWD + NA engine paradigm is the fact that it’s allowed Audi to expand much more easily than BMW into new market niches without harming their brand legacy. For example, when Audi finally broke down and released an SUV (the Q7), their quattro AWD system gave the new car instant 4WD cred. I find it fascinating that they waited longer than any of their competitors (BMW, Porsche and Mercedes) to develop the car as well, when they have arguably more off-road cachet than any of them. In retrospect, it’s the sign of an automaker that seems to know exactly what it’s doing, in contrast to BMW’s “throw everything at the wall and hope something sticks” approach for the past decade.

      • janon says:

        The vast majority of people FAR overstate this, taking comments from professional race car drivers pushing these cars to 9/10ths at Laguna and them extrapolating them into some kind of rule.

        90% of people 90% of the time do *nothing* with these cars that would allow them to benefit from the RWD bias and oversteer tendency of a BMW vs the FWD/AWD understeer tendency of the Audi. On forums everyone is the Stig able to perceive minute differences during their morning straight line highway commute apparently. The reality is most buyers are just bench racing hero’s waving articles around “proving” their ride is “more dynamic” because Clarkson said so. Were they honest they’d admit they have no clue what that even means.

        On the flip side, build quality, interior design, exterior design, ease of use and AWD utility can be used 100% of the time by 100% of drivers. This is the reason Audi has made progress. Imo they don’t really need to modify their core platform approach to appeal to dreamer bench racers. They just need to keep bringing value in the form of design language and build quality

        Biggest risk is that VW dilutes the brand by blurring the lines. When a VW beats an Audi consistently in reviews (this has been happening) the brand has MUCH bigger issues than competing with BMW

        • Matt says:

          I agree. I don’t see the same kinds of folks cross-shopping Audis and VWs, though. Most consumers probably don’t even know the brands are related. For example, Audi has had a fair amount of success marketing the A3 in the US as distinct from the Golf, even though underneath the cars are basically identical. VW’s recent move downmarket (making more “American” cars) has lessened the risk of competition as well. No, between their design integrity, technological leadership and motorsports success, I think Audi have done a great job of creating a completely separate identity from their parent company.

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