• by Karl Greenberg , October 12, 2006

Audi yesterday unveiled its first "Look, don't buy" brand-experience showroom in the U.S., on New York's Park Avenue. The launch of the storefront gallery, called the Audi Forum, was paired with the U.S. debut of the R8 sports coupe, which goes on sale in fall of 2007.

The car, carrying New York Mayor Michael Bloomberg as a passenger, was part of a caravan of Audi vehicles--including the R10 TDI, the first diesel to title in the Le Mans series. Clearly, Audi plans to make more noise in the coming months. It will--by the end of 2007--have released 19 new and derivative models in two years.

"Audi is the most undermarketed luxury brand in the U.S.," says Jim Sanfilippo, consultant with AMCI, Detroit. "All the signs are that they are getting ready to make a major run on the U.S. market."

Yesterday's fanfare follows big changes at the Auburn Hills, Mich.-based U.S. sales arm of Audi, which is a Volkswagen sibling. Those changes include a 48 percent staff turnover. An agency review is also underway.

Scott Keogh, who left Mercedes-Benz in May to become chief marketing officer, said the company will boost its ad budget to support the new wave of products. Audi reportedly spends $70 million in measured media yearly.

Audi recently launched a creative review, including 13-year incumbent McKinney, Raleigh, N.C.; Publicis Groupe's Fallon, Minneapolis (formerly BMW's AOR); Bartle Bogle Hegarty, New York (the agency's London office handles Audi's UK account); and Venables, Bell & Partners, San Francisco.

"We are looking for big ideas to get people to talk about Audi," says Keogh, adding that Audi will boost budgets for both national and dealer advertising. "We need to be a little more provocative, charismatic and passionate. We have been reserved. I think it's time to take the gloves off."

The notion of a dealer-free showroom is not new, at least in Europe and Asia. There are Audi Forums in cities like London, Paris, Berlin, and Beijing. Keogh says the showroom--which Audi will replicate in other U.S. cities--is meant to be a nexus for fashion events, art shows, and product launches by partners like Louis Vuitton and audio supplier Bang and Olufsen.

Still, while Audi has sold 890,000 vehicles in 40 global markets--and has seen sales rise 5 percent to 62,579 vehicles this year in the U.S--it has not been able to keep pace in the U.S. with BMW, Lexus and Mercedes, the luxury benchmarks. Lexus has sold 234,474 vehicles, and BMW 230,084 vehicles, through September.