This year should be a record year for the South African premium car market, reaching around 83 000 units, up 4.4% on 2012 numbers, says Audi South Africa (SA) head Ryan Searle. This follows on from 5.6% growth in 2012 over 2011.

For the year to end-April, growth in the local premium market was recorded as 7.7%.

Searle says this healthy expansion in the upper end of South Africa’s new-vehicle market comes in the context of premium vehicle manufacturers introducing more lower-priced volume and niche cars into the segment.

Audi SA had a good 2012, he adds, selling 16 743 new cars for 15.5% growth, compared with 2011. Audi SA’s market share for 2013 increased to 21.1%, breaking the 20% “glass ceiling” the German brand once faced.

“We are the fastest-growing premium brand in South Africa,” says Searle.

At the heart of Audi’s success is “product” and “volume product”, he adds.

Last year saw the introduction of the A1 Sportback, a small five-door hatchback, as well as the Q3 compact sports utility vehicle.

“These were new segments for us, gaining us new customers,” says Searle.

The Audi A4 and A5 also received a midlife spruce-up in 2012, with the A4’s positioning becoming especially important to Audi SA in light of model introductions such as the new BMW 3-Series. This is why the new A4 features higher specifications and a lower price than the older model.

Audi SA is poised to deliver 19 000 vehicles to new customers in 2013, says Searle.

“And we plan to exceed this in 2014. Audi is on a growth path in South Africa, with every year a record year. Apart from 2009, Audi achieved record sales every year in the past decade.”

However, at around R13 to the euro, the rand slipped from R10.50 in October last year and conditions are challenging for the imported brand, Searle notes.

It is not all about volume in these economic headwinds, but also profitability.

Audi SA was profitable last year and is still profitable at this point, says Searle, but the company is not in the same advantageous position it found itself in 2012.

Audi had increased prices by 3.1% year- to-date in an attempt to compensate for currency fluctuations, with another price increase possible later this year.

However, Audi SA cannot price simply on currency fluctuations.

“Our pricing behaviour is muted relative to the movement of the rand. We have to base our pricing on competitors and the market, not the rand spot price.”

Searle expects the South African premium car market to remain stable into the foreseeable future, especially as buyers in this market are, on average, still able to secure credit, and with interest rates remaining at historical lows.

There are also “endless product introductions” in the premium market, with pricing here, as is the case in other segments, well below inflation for “a few years now”.

“Consumers can see that,” says Searle.

Audi products already launched onto the local market this year include the A4 Allroad, a facelift to the R8 Spyder and the new A3 Sportback. Still to be introduced is the RS5 cabriolet, the RS7 Sportback and the RSQ3.

There are no immediate plans to introduce a hybrid model onto the South African market.

Audi sold 1.45-million vehicles globally in 2012, and is, since 2011, in the second position in the worldwide premium market, having overtaken Mercedes-Benz.

By 2020, Audi hopes to overtake BMW and become the number one premium brand in the world.