Audi’s U.S. Diesel Strategy: An Interview with Wayne Killen

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DIESEL SALES AND DIESEL FUEL PRICES

JS:       What do you see in terms of diesel sales in the next year or two?

WK:      The JD Power survey suggested that diesel penetration will hit 7% of the market by 2016.  The same report pegged hybrid, plug-in hybrid, and pure electric penetration – combined – at 7% in the same timeframe. We definitely see an increase coming in our diesel sales as well.

JS:       What’s the short-term solution in increasing fuel economy and lowering greenhouse gas emissions?

WK:      There is no silver bullet in decreasing greenhouse gas emissions but you need to bring your best technology to bear.  TDI is clearly our best short-term answer.  It’s easier to ramp up TDI models across the portfolio and that translates into the increase I mentioned for the TDI fleet in the U.S.

JS:       What is Audi doing in the areas of hybrid -and electric-vehicle technology in its lineup?

WK:      There’s a lot of investment going on in these areas.  We recently announced the A3 e-tron pilot program but clearly understanding the infrastructure is a big part as well.  We are going to commit to this technology and we’ll be able to showcase our technical advantages very well here.

JS:       At this point, there’s a relatively small group of environmentally-conscious consumers who are driving the purchase of non-traditional (i.e. non-gasoline) models. What makes consumers decide, in your opinion?

WK:    With gas prices below $4, folks are thinking about the nominal price difference for diesel but the Chevrolet Volt is at a considerable price premium for a lower emission vehicle that doesn’t use as much gas.  What’s good about TDI is that you can have your cake and eat it too. It’s got the power, it’s got the elasticity, the smooth characteristics of common rail, very little noise, and no visible pollutants.  There’s hardly any trade-off and just a slight premium up front but the breakeven is very reasonable.

JS:      So is there a tradeoff?

WK:    With diesel, it’s a case of consumers getting an engine with good performance and even better fuel economy and they are not trading off anything, really.  With some engines, especially battery electric, there’s range anxiety and cold weather starting issues. Those are big hurdles. The technology has to come along further [for there to be greater acceptance].

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