Audi could make it simpler for dealers

Audi dealers need a long-term study to simplify the way they interact with the factory to improve profitability and efficiency, the newly elected chairman of the Audi National Dealer Advisory Council says.

Don Flow, CEO of Flow Automotive Cos., a dealership group headquartered in Winston-Salem, N.C., that has 44 new-car franchises, including four Audi stores, says a systematic review would help Audi dealers.

"If we're serious about how to really reach Audi's full potential in the premium segment, we've got to put a stake in the ground to do this," Flow says.

Audi dealers in the U.S. don't have a lot of say over the brand's design or vehicles but do hold sway over how it interacts with consumers, he says.

"So what are the things that we can impact? Those are the things I described, the things that will help the brand from a customer experience level and from a dealer level, eliminating bureaucracy and improving productivity and efficiencies," says Flow, whose group sold over 30,000 new and used vehicles last year. "Anybody knows how to jack up profitability in the short term. Our business is sustainable long term with profitability that builds upon itself. So what's that going to look like in today's world and how do we go from here to there?"

Flow said the final half of 2020, with its strong demand but reduced inventories post-COVID, led to great profitability for Audi dealers — something they've struggled with extensively in recent years. Profits are driven by volume, margin and the cost to create that margin, Flow says.

"We have to look at those three things and ask what is the appropriate level of volume to sustain this level of margin, and what is the cost to do it? So the formula sits within there. We need to deconstruct that, look at that and see what it's looked like in the past, how it is measured up against other premium brands, where it's been excellent, and where it's been deficient," the longtime dealer said. "That's part of what we're going to do."