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Audi poised to approach luxury leaders in US if Trump allows

Thursday, January 5, 2017 - 12:25

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Volkswagen AG's premium Audi, the lone brand among the top six luxury lines in the US to increase sales last year, is poised to keep gaining ground on Mercedes-Benz, Lexus and BMW - if President-elect Donald Trump allows.

[MICHIGAN] Volkswagen AG's premium Audi, the lone brand among the top six luxury lines in the US to increase sales last year, is poised to keep gaining ground on Mercedes-Benz, Lexus and BMW - if President-elect Donald Trump allows.

Audi's US sales increased 4 per cent in 2016, bucking the trend of declines by the three premium industry market leaders, plus Cadillac and Acura. While its parent Volkswagen was embroiled in battles over cheating of emissions regulations and saw deliveries dip, Audi was relatively unscathed. Only about 7 per cent of its US vehicle sales were diesel-powered.

Entering 2017, Audi is positioned for even greater gains. It'll get a full year of Q5 sport utility vehicle output from its factory in San Jose Chiapa, Mexico, which opened in the second half of last year.

Most of the 150,000 units of planned production from the site are slated for the US, though Mr Trump has repeatedly said he will slap tariffs on cars imported from Mexico.

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Market voices on:

"The automotive machine in America is working for the most part," Scott Keogh, president of Audi's US unit, said in a conference call on Wednesday.

"I don't know if anyone is going to want to completely flip over the apple cart on something that is relatively stable and working," he said, in response to a question about Mr Trump's trade policy.

Audi's US deliveries rose 14 per cent to 23,195 in December. The gain outpaced market leaders which all declined or improved less than 4 per cent. The outgoing Q5 model, one of Audi's most successful in the US, had a record month in December with sales of 6,396 units. A redesigned version arrives at dealerships in March or April.

Mercedes Wins

For the year, sales by Daimler AG's Mercedes slipped 0.8 per cent to 340,237. The showing was good enough to take over the top spot in the US luxury market, supplanting BMW, which fell to third place behind Toyota Motor Corp's Lexus.

The sales declines by Audi's peers last year were 3.9 per cent at Lexus, 9.5 per cent for BMW, 3 per cent by Cadillac and 8.9 per cent with Acura.

With luxury vehicle sales likely to hold steady around 1.8 million units in 2017, any growth will have to come from someone else, Mr Keogh said.

"We are certainly conquesting a lot more from the Big Three in luxury: BMW, Mercedes, and Lexus," he said.

"The biggest opportunities come from that."

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