How Audi went from pariah to BMW and Mercedes rival

Here's how Audi is catching up to Mercedes-Benz and BMW

From the 1980s to the late 2010s, Audi went from being an also-ran among German luxury car brands to a serious rival to BMW and Mercedes-Benz. Now it is recovering from a few recent stumbles and is trying to transform itself for a new era of electrification.

The German luxury carmaker last year began delivering is e-tron fully electric SUV, the first of several battery-powered vehicles the brand is planning to release over the next several months.

Audi's transformation into a brand heavy on electric vehicles is part of its parent Volkswagen's broader commitment to electrification in the wake of a diesel test cheating scandal that rocked VW to its core.

It is also part of a product overhaul the brand has been promising since top brass acknowledged a brief slump in sales. After years of global growth, Audi's sales fell 3.5% in 2018. In November 2018, the brand's U.S. sales also broke a more than 100-month streak of year-over-year monthly growth hat had lasted since November 2009.

At the time Audi attributed it to difficult market conditions and challenges presented by Europe's switch to the Worldwide Harmonized Light Vehicle Test Procedure, an emissions regulation standard.

"We are currently in a challenging phase," said Audi CEO Bram Schot in the company's 2018 annual report. "Our sustainable economic success, our profitability and our future viability are at stake."

The e-tron has only been available in the U.S. since May 2019, and as of Dec. 31 sold just more than 5,000 units in the country.

It is a big gamble, but the brand has some experience with completely reinventing itself. In the 1980s Audi was severely tainted by an unintended acceleration scandal that sent sales crashing. Over the next two decades, Audi overhauled its product line, was early to the game of integrating high-tech features into its cars and became extremely popular with luxury buyers from the so-called millennial generation.

Now it is entering the electric market, which in the U.S. is all but controlled by Tesla — another brand that seems to have captured the attention of the sort of youthful, tech-focused consumers that flocked to Audi just decades ago.