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Audi Winning Over Lexus Drivers With Look-alike Ads

Humorous Spots Show Q5 Standing Out in Rows of SUVs

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DETROIT (AdAge.com) -- Audi of America's strategy to target drivers of the Lexus RX compact SUV for its first entry in the category, the Q5, seems to be paying off.

Many Q5 purchases are made by RX drivers, Audi of America President Johan de Nysschen said today in a speech to the Automotive Press Association. Although Mr. de Nysschen wasn't specific, roughly half of the trade-ins at Audi dealerships for the new Q5 are the Lexus RX, Audi Chief Marketing Officer Scott Keogh told Advertising Age at the New York auto show earlier this month.

After his speech, Mr. de Nysschen credited Lexus with being a strong brand with strong dealers, saying the "RX defines Lexus," which controls 70% of the luxury-compact-SUV segment with that model. So it's logical for Audi to target the category leader, "but not everyone wants to be one of the herd," he said.

Audi, which has been advertising aggressively in spite of the worst auto-industry downturn in decades, pokes fun at the popularity of the RX in Q5 launch ads from Venables Bell & Partners, San Francisco. Although the pair of Q5 launch TV spots don't mention the Lexus model specifically, rows of the RX appear in both. In the ads, the actors can't locate their SUVs since all the vehicles look alike -- except for the Audi.

'Not a fat-cat brand'
"We wanted to get Lexus owners to challenge their own thinking," Mr. de Nysschen said. Audi's image is modern, sophisticated, but understated. "We are not a fat-cat brand."

Based on information from auto-data site Edmunds, Lexus incentives jumped from $997 per new vehicle in March 2008 to $3,402 in February 2009 before falling to $1,928 per unit last month. Audi's incentive per vehicle was $3,235 in March 2008. It fell to $1,596 in February 2009 but rose to $2,333 in March, according to Edmunds.

Audi sold 1,752 Q5s in February and March, according to Ad Age sibling Automotive News. Lexus sold 18,915 RXs in the first quarter, down 11.8% from the same period a year ago. But in March, RX sales fell 20% to 6,177 units. Lexus had an extra month of sales in January selling down the outgoing RX model, and in February added the redone 2010 RX 350.

Ads from Publicis Groupe's Team One, El Segundo, Calif., position the redone RX model as "Reinventing the vehicle that reinvented it all."

A Lexus spokesman didn't return calls by press time.

Audi gaining market share
U.S. luxury-auto sales fell 33% in the first quarter of 2009 compared with the first three months of 2008, but Audi of America gained market share, Mr. de Nysschen said.

Even though Audi's total U.S. sales slid 23% in the first quarter of 2009 to 15,808 vehicles, the brand gained market share in the period, to 0.7% vs. 0.6% a year ago, according to Automotive News. By comparison, Lexus' market share stood fast at 1.9% in the first periods of 2008 and 2009, but its total vehicle sales skidded 36.8% to 42,069 units. BMW also gained share -- to 1.9% from 1.6%, with unit sales dropping 26% to 42,731, said Automotive News. Mercedes-Benz sales fell to 40,255 units in the first quarter, but the brand's market share rose to 1.8% from 1.6% after the first quarter of 2008.

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