The changes made to the carmaker's logo were hardly revolutionary but the thinking behind it - about the very nature of corporate identity - certainly was, says Tim Rich.
'One name. One standard. Everywhere.' That's the stirring manifesto doing the rounds at Audi. Just five years ago this three-point declaration would have been pure blue-sky naivety. A DM172 million (£58.3 million) profit in 1992 plummeted to a DM89 million loss in 1993 - the klaxons at its owner, Volkswagen, were blaring. Positioned as the premium marque within the Volkswagen Group, most people saw it simply as a more technically sophisticated VW, and, with competition in the European market proliferating, that positioning wasn't strong enough.
Today the picture emerging from Ingolstadt, Audi's home town, is very different. At year end in 1996 global car sales were up 9.9% to 492,046, turnover had increased 12.8% and 2,200 more jobs had been created worldwide.
After tax and a DM125 million profit transfer to VW, the company made a net profit of DM177 million. In the UK the company won the Autocar Award for Best Manufacturer at the Birmingham Motor Show, and the new A3 was voted the Design Museum's '101st Statement of Design'.
Who or what was the real catalyst for change is unclear, although Volkswagen Group chairman Ferdinand Piech was clearly a factor. However, the company's renaissance is now most definitely underpinned by a commitment to design, and particularly corporate identity design. The foundation for this development lies in a decision taken in 1992 at Volkswagen headquarters: the group would separate the operations of its brands - Seat, Volkswagen and Audi (Skoda was added later), giving Audi the opportunity to define its own market positioning. By spring 1993 a radical re-organisation and re-branding of its cars had begun and a new strategic approach was in place. Juan Jose Diaz-Ruiz, executive director of marketing and international sales, explains: 'In the past we developed and produced cars. That was our main competence and the marketing was done by Volkswagen. But we were convinced that we needed to be more dynamic, more passionate, more human and more emotional as a balance to our historical technology base.'
Neil Burrows, then marketing communications manager for Audi UK, and now the UK head of marketing, witnessed the image problems of the early '90s first hand: 'Audi as a brand was a bit of a mystery. It wasn't well known outside Europe; in the UK its profile was relatively low - positive, but not widely understood. If you looked just at corporate identity issues, we had rings on the cars, oval lozenges on the print work, different logos for the sport division; there were at least three different logos in four different colours.' Berlin-based MetaDesign was the corporate identity specialist that brought order to the confusion, introducing a contemporary working of the corporate typeface and lozenge, a three-dimensionalisation of the rings and a clear set of application rules. The changes were hardly revolutionary, but the accompanying philosophy about the very nature of corporate identity was - at least in Ingolstadt. The new view recognised that corporate identity ultimately equals the values communicated by any physical aspect of the company, not just the various uses and abuses of the logo. Thus, advertising, the architecture of dealerships, direct mail, car design, Internet, stationery - all should be viewed as expressions of corporate identity. 'Corporate identity has to be integrated; everybody has to be involved, has to agree, has to live it, has to transmit it and has to implement it,' says Diaz-Ruiz. 'Corporate identity is not static.'
Such an approach means key agencies have to be included in discussions, hence the Audi Design Circle and the Audi Agency Network. Faced with the rapid growth of export markets and international production, the corporate identity team is firm on maintaining a unified brand image worldwide in all group discussions, with the company positioned above individual products in the brand hierarchy. Ultimately, however, such ideas need to be communicated to the 5,000 importers, dealers and agencies working around the globe.
Using a slightly updated version of the dreaded corporate design manual, the company has tried to reflect Diaz-Ruiz's description of corporate identity as dynamic; information can be incorporated without the need to reprint and redistribute the whole document and 30 new areas have been introduced since its creation. An accompanying CD-ROM contains digital artwork.
However, a new digital system is imminent which will make the manual and CD-ROM look outmoded. Each organisation working with Audi will be connected, via computer, to a network similar to a standard Internet connection, except that it will be closed and (they claim) secure. The electronic 'manual', christened ERA (for the three-part process of producing materials: Element Rule Application), contains digital artwork and clear explanations of how individual elements can be woven into a complete application. But it also goes further, using the interactivity available to provide on-screen tutorials and forums between users, designers at MetaDesign and Audi Marketing.
Audi UK is due to become an active part of an up-and-running ERA system in the second quarter of 1998. It should assist the development of more Audi Centres - new-style dealerships which are, in effect, physical manifestations of the corporate identity and a major move away from the current car-led, combined VW-Audi showrooms. There are 67 operational, with 135 the target.
'They have a big part in our future at Audi,' says Burrows. 'We've tended to be a guest in someone else's franchise. Having something that manifests itself as the brand on the street is very important to us.'
Inevitably, some dealers have been loath to spend on specific fittings, furniture and materials, but the benefits are increasingly perceptible: 'If you look back five years, the average Audi dealer was making £600 profit on a new car sale,' says Burrows. 'Now they are making £2,000 and they are selling twice as many. When they start to see that return they are far more willing to invest.' It is impossible to assess the true effect of the corporate identity programme until more Audi Centres have been completed, but current research indicates it has already had a powerful impact in Germany. The Best Cars 1997 report compared the way German consumers felt about various car brands between 1993 and 1997. In the 'I like the marque' category, Audi's 1993 figure was 38%; in 1997 it was 48%. Diaz-Ruiz is bullish about the results.'We really came from nowhere and today there is only a little gap between us and BMW.' Now, armed with a focused image and ERA, the company must repeat its success worldwide.