Audi’s TiTilating Malaysian entry

Audi Malaysia looks set to heat up the luxury segment; launches third-generation Audi TT


The “best” kept automotive secret in Malaysia has been Audi’s entry into Malaysia. For more than 6 months, the company’s Bangsar office has been a hive of activity and the talk of the industry but little has come in the way of any official announcement. Last week, the company broke cover when they launched the third generation TT coupe, but only just.

This is curious to say the least, because the Audi entry is one of great significance to the premium segment here in Malaysia. Up till now, the brand was franchised to DRB-Hicom, who have considerable heft, both commercially and politically. The long handover is not unusual as principals generally try to hold off until they can get the best deal. Market talk is that Audi has been in discussions with DRB- Hicom, to find a “win-win” transition solution.

The sooner this happens, the better for us as consumers. There are a multitude of reasons for this. Fundamentally, it is about money. The brand owner takes the long view and has the coffers to see it through. A franchise holder is but a trading company and any sort of investment will always be contingent on quick returns. Very few franchise holders manage to transcend this type of mercenary mindset, although there have been some exceptions like Tan Chong.

The case for direct entry is clearly borne out by Audi’s two biggest rivals, Mercedes-Benz and BMW. After establishing subsidiaries or “National Sales Companies” here, these two brands have grown faster than the industry average, with BMW clocking a cumulative-average-growth-rate (CAGR) of over 30% since 2003 and Mercedes only slightly behind. This is staggering when you consider the industry CAGR for the same period was a little more than 4%.

While Audi is not likely to upset the apple cart for its fellow Germans straightaway, the current duopoly will definitely be challenged. Globally, Audi bested the other two in April, selling 152,850 units (Mercedes – 148, 072; BMW – 148, 896).

The presence of the brand owner should bring about earlier introduction of models, a more complete line-up, higher quality after-sales (yes, there are exceptions and we are SURE that Audi is well aware) and a better ownership experience for the customer. The reality is that despite the premium segment’s seemingly unstoppable growth, it IS finite and will eventually start to become much more competitive. And ultimately, this is a good thing because not only will we as customers benefit, so will the automotive industry.

So here’s wishing Audi Malaysia a speedy start because it’s starting to feel a little like Godot.

(Audi Malaysia recently unveiled the third generation Audi TT 2.0L TFSI coupe at a glitzy event in downtown Kuala Lumpur. It’s interesting to note that at RM284,900, it’s significantly lower in price compared to its predecessor that was launched back in 2007 for RM368,000. The new TT offers more performance (230hp/370Nm; 0-100km/h in 5.9sec) but is also more frugal relative to the second generation coupe)