Last week BMW Group Australia managing director Guenther Seeman took at shot at fellow German automaker Audi saying the brand from Ingolstadt is not a premium competitor because it doesn't offer rear-wheel-drive cars, instead referring only to Mercedes-Benz and Lexus as his competition in the Australian market. Seeman also dinged Audi by suggesting it was buying market share by discounting its vehicles, and therefore violating the trust of its customers.

Seeman's counterpart at Audi Australia, Joerg Hofmann, has fired back at BMW by insinuating the Bavarian brand is just plain arrogant. Concerning the argument that a vehicle must be rear-wheel-drive to be considered part of the premium market, Hofmann says, "For me, a premium product has nothing to do with the drivetrain. I think it's even boring for the customer if you offer only one drivetrain." Finally, in reference to Seeman's charge that Audi is buying marketshare with discounts, Hofmann points out that BMW has already begun offering thousands of dollars in discounts on its newly redesigned volume seller, the 3-Series.

Audi is quickly gaining market share in many markets around the world, and Hofmann recognizes that each of his competitors will react to the brand's success in different way. In the first five months of 2007 for instance, Audi's sales have grown 41% in Australia compared to BMW's 4.1% increase in sales. Nevertheless, Audi remains in fourth place behind BMW, Mercedes and Lexus. Though it still has a long way to go to overcome its rivals, Audi has definitely turned up the heat on its competition. Some of them, like BMW Group Australia, clearly recognize the threat, even if they deny it.

[Source: GoAuto via Motor Authority]