Audi Shows How a Leopard Can Change Its Spots

In the U.S., Audi (NSU) is an exception to the rule that it's next to impossible to change how people see an automotive brand.

Among luxury icons, "everybody" knows that BMW is the performance brand, Volvo is the safe brand, Mercedes-Benz is the prestige brand, and Lexus is the quality brand (although parent Toyota (TM) seems to be doing its best to erode that).

But Audi? Today it's carving out a niche for itself as "the engineering and technology brand," with a strong element of performance. I always think a well-executed, distinctive gimmick helps. In Audi's case it's the row of tiny, brilliant white lights underlining the headlights on its newer models (photo). There's no mistaking a new Audi for anything else, even in the dark.

Before the last couple of years, Audi didn't have much of an image in the United States, and what image it had was negative. At the same time, Audi regularly outsold its German luxury competitors in other world markets.

"Audi is a good example of an image that has pulled itself around. In the U.S. for many years, it had a very negative image," said Dave Sargent, vice president of global vehicle research for J.D. Power and Associates.

Until the last couple of years, Audi was defined more than anything by the fact that more than 20 years ago, it somehow survived in the U.S. market, following the original unintended-acceleration flap. It was a big deal, even though Audi was ultimately exonerated. When I first moved to New York in 1988, there were still parking garages with signs that said, "No Audi 5000's."

Like Harry Potter, who is known in the books as "The Boy Who Lived," Audi was, "The Brand That Survived Unintended Acceleration."

Meanwhile, Audi's long-suffering fans liked Audi for the fact that it's different, and they didn't see themselves coming and going. Audi is the un-Mercedes-Benz and the un-Lexus. They also liked Audi's all-wheel drive. That's getting to be less of a competitive advantage, but it's still a core value of the brand.

Audi still pitches itself as the road less-traveled-by, but it's turned up the volume, with giant ad spending, for instance, on the last couple of Super Bowls. Its new models are much more distinctively styled, and there's that headlight gimmick.

Audi's U.S. sales fell 6 percent in 2009 to 82,716, but that was better than most brands did last year. Through March, Audi's 2010 U.S. sales were up 35 percent year to date, a bigger increase than BMW, Lexus or Mercedes-Benz.

Here's another thought: If Audi can change its brand image, maybe there's hope for Fiat in the United States, too.