German Car Zone

As chief of Audi’s division known as quattro GmbH, Stephan Reil holds an enviable position. If you consider the concept of high-performance, Stephan virtually holds the keys to the kingdom. All of the most exclusive performance products that have come from Audi in the last ten years Mr. Reil has had a hand in developing – RS 4, RS 6, R8, Q7 V12 TDI… the list goes on. S-line models fall under his domain, as do models tailored specifically for their owner by Audi Exclusive. If there were a vote to determine the standard bearer of the passion that drives Audi, then most would probably agree that Mr. Stephan Reil would win such an election.

Not surprisingly, Reil is passionate about what he does. There’s a glint in his eye and he always seems about to smile if a grin is not already on his lips – like he’s getting away with something that perhaps he shouldn’t be doing. But, he should keep it up if you ask Audi’s ever-growing mass of enthusiasts, it’s own Board of Directors firmly within that group.

Just a few weeks ago we caught up with Mr. Reil at the Audi Forum Neckarsulm. This is, in fact, Mr. Reil’s domain. A main purpose of the large customer-focused facility comprises of a quattro GmbH showroom, packed with one-off examples of Audi Exclusive’s handiwork. A factory building currently housing RS 4 and RS 6 production is not far away and a newer facility dedicated to the hand-building of the R8 is not much further. It would be a quick walk to either building, though unless you’re an employee of the Neckarsulm plant, you’ll kindly stick to the transport bus thank you.

Reil is here to give us a little background. Even those well-informed on Audi might be surprised to know just how much falls under his watchful eye and just how extensive a program he and his team have built. We find this out as we join a very small group of press who also happen to be in town to have a quick chat with the man… perhaps over a cappuccino with a most interesting dusting of cocoa from the facility’s Nuvolari restaraunt. A transcription of the discussion follows:


Stephan Reil: Welcome. Let me give a short introduction to make clear who quattro GmbH is and what we do. Our business is separated into different divisions. One division develops and partly produces the RS models: RS 4, RS 6 as you probably know. Then the next division is where we are responsible for development, production, quality, and everything surrounding the R8. The third thing is accessories, which means everything that is a special option on an Audi car labeled "S-Line" is developed by us, the wheel program, etc. The fourth technical part, the individualization of a car, means a customer can order the car just as he wants to have it - special colors, special materials in the interior, wood, carpet, different kinds of leathers, colors, and some technical equipment like a refrigerator or a fax machine, rear seat entertainments, DVD systems… those kinds of things. Then we have a fifth division that I am not in contact with. That is the lifestyle program, including jackets, caps, umbrellas, cigar cutters, humidors… everything.

This is just to make clear who quattro GmbH is. I am responsible for technical development of the first four divisions, not for the clothing. When we are finished, here in the building, on the first floor, we have a showroom with all cars that are developed by us or where we are involved. We have a studio where the European customer has the possibility to come with his dealer to the plant and work with our staff to choose the interior or the special equipment through the individualization program. We can have a look after and see those things. Let's start with questions.

Editor’s Note: European Delivery Program buyers purchasing R8s take delivery here in Neckarsulm. All other models are delivered to American consumers in Ingolstadt.

Journalist: What kind of changes have you seen in recent years in terms of the kinds of things that the worldwide automotive consumer has demanded that you have had to respond to? What kind of challenge has that presented for you?

Reil: You mean in our high performance cars?

Journalist: Yes, specifically in high performance.


Reil: The big headline for us when we start RS development is to have the technical possibilities in the car. I have been in this position now for 10 years at quattro GmbH. I was involved with the first RS 4 in 2000. If you look to the past, what you see is that the power is increasing. The first RS4 began with 380 horsepower, then we had 420 in the next RS 4. The old RS 6 was 450 horsepower and the new RS 6 is 580, so you see the increase in power. You also see, if you drive an RS 4 from 2000 and a new RS 4, what you feel is there is much more quality in the car - in how precise the car drives, how the car handles. The driving performance on a racetrack is so much different from one car generation to the next - the improvement on handling and comfort. In the past a sporty car had a very stiff suspension, a quite uncomfortable suspension. For me, the improvement of comfort and sportiness in driving besides the power increases, this is the most exciting. In an actual car you have more comfort than on the former car and you have a much higher handling performance.

Journalist: Related to the increases in comfort and drivability and the quality of the car, has there been any thought on your side that are maybe a little more stripped down, more elemental, along the lines of a Porsche GT3 versus the Carrera? We are adding some much comfort to these cars these days that maybe we are moving into making them too much of a luxury car for the sports car purists and maybe from an industry standpoint, would it help you guys to do something more elemental or are you comfortable with where you are?

Reil: We have already, about three or four years ago, had a special version of the TT. I am not sure if that car made it to the US. This car was a special version of the old TT and this was a stripped down car. We removed the rear seats, we just had a bar and a net like the NASCAR racecars have in the window. We had a lighter seat, we had a real sport seat with everything - the adjustments in length was manual, the adjustment for height you needed real tools. This was a real stripped car - no air conditioning. We threw out a lot of the comfort stuff. This was a car about 90 kilos lighter than the standard TT and we had an increase. It was a 1.8T with 225 horsepower that we pushed to 245. We had 20 horsepower more and a 20% increase in torque and about 170 pounds lighter car. Of course in a sports car this is the direction to go in where you can make a business case. On an RS 4 or an RS 6, the possibility for getting out weight from the car is very limited. What the customer demands in that kind of car is not a radical light car. It makes more sense on a sports car like the TT and maybe in the future on an R8.

Journalist: What key features do you think a luxury car must have?


Reil: With a luxury car you do not need an A8. I am the wrong person to talk to about those kind of cars. On an RS model, in my opinion the RS model has to have outstanding handling performance. The car must be able to have a good record on just daily driving but also on a racetrack. For example, all of our cars, quattro gmbh cars, go through a durability test for 8000 kilometers on the Norschleife. That is where we check the racing ability and the durability for a car on the racetrack. We go 8000 kilometers in a given time for wet and dry conditions, a fully loaded car and if somebody had been on the Nordschleife, 8000 kilometers there is the life of a car. On an RS what you need to have is outstanding quality in detail. That means the materials, that means how it is crafted and those kinds of things.

Journalist: Can you talk about the tension between the development of an S8 and having a premium stereo system or something like that. So you have a nice stereo system but you have a car that you are trying to make perform to the dynamic handling characteristics. How much tension is there between what the engineers want to do and what the customers want?

Reil: I think there is no big tension. Of course the engineer is more focused on performance in our category of cars. It could be in customers that are focused on slightly different cars, like on an S8, they surely will have another focus. They will have more focus on a stereo system, on the navigation system and the like. They will define luxury on those parts. I think somebody who is a potential customer for an RS 4 will not miss a climate seat on that car. Of course he will find a climate seat as something luxurious but he will not miss it in an RS 4 because he knows on an RS 4 the focus on a seat is being one with the car - good support on the shoulder, on the side of my legs and on the other hand it is not too hard to get in and out of that seat. His focus is on being one with the seat and with the car. He is completely different to an S8 customer who defines luxury with more of the comorts.

Journalist: It seems that the American marketplace is getting more crowded with premium nameplates coming up with performance divisions. Lexus now has the F, and there’s AMG. How do you picture quattro working to separate Audi from the other brands? Also, how can you separate S, RS, and quattro? There are three different names and titles from the rest of the pack in general.


Reil: Our main competitors are the M models of BMW and the AMG models from Mercedes-Benz. We have clearly divided three lines within a car. The A4, for example, is the standard with the 1.8 up to the 3.2 I guess. Then we have the S model. On the old A4 was the 4.2 V8 with 330 horsepower. The S model is defined as the sporting car. Above that is the RS4. This is defined as superior performance, handling, and showing the technical possibilities. This suits very well when you compare them to the competitors' cars. The RS model is positioned from the power level to the top models of AMG and M. But of course we have one thing that they do not have - the quattro drive train. The main difference, this gives you the possibility to bring all of that power to the road and not just lighten yellow lamps in the car.

Journalist: All of the European manufacturers are facing Co2 regulations coming up in the next few years. How do you see that effecting quattro and the kind of cars that you are going to be building the next generation?

Reil: Two answers for this issue - CO2. First of all, the relevance of an RS model on global CO2 levels you can just forget because of the low volume and if you multiply the average mileage that an average RS drives a year and then multiply the number of cars… just forget it. But, that doesn't mean we ignore the issue.

There will be no chance to have a 500 horsepower car with a CO2 emission of 140 grams per kilometer. It is a technical impossibility. That is the reason why, in my opinion, it is completely the wrong direction just to have a certain limit, which is a discussion in Europe, to have a certain limit on CO2 and not more. You have to bring in the size of the car and the performance of the car and then have some different levels, 140, 180 grams, whatever. What we do already, what we did n the past and what we do in the future is of course to have the most efficient engine and the most efficient drivetrain and the most efficient car that is possible at that time. I can give you an example: the RS6 from 2002, 450 horsepower, V8 twin turbo, and now the new RS6. We have an increase in power of 130 horsepower and we have an increase in torque of about 100 Newton Meters but the average mileage, fuel consumption is 15% better than on the former car - this thanks to the FSI technology. The RS 4 was an MPI engine and now we have the TFSI. Higher compression ratio you can design in an engine with TFSI, you can use the intercooling, the injection of fuel directly in the chamber. The transmission, the clutch to overcome the clutch in the torque converter. All of that stuff. Light wheels, reducing rotating mass - all that benefits in good fuel consumption. And of course there is a lot of work on the inner engine to reduce friction loss. This benefits in higher output and of course better fuel consumption.

Journalist: Along those lines, you just showed a R8 TDI concept car, would you consider any of the diesel or hybrid technology that you are playing within the scheme of performance with perhaps a future RS model? Is there room for diesel or hybrid in any of that?

Reil: First I want to say something about the concept R8. I think overall diesel is, at least in Europe, the number of diesels is getting higher and higher because it is such an efficient engine. In the US, as far as I can see from Europe, the diesel is coming but still if you compare the installation rates of gas and diesel, diesel is almost nothing in passenger cars. I am sure though that diesel will be a success in the US.

There are two reasons why we built a V12 TDI R8 concept car. One is because we are racing with a diesel engine in Le Mans, in the American Le Mans Series, in the European Le Mans Series and we show how sporty a TDI can be. This is one reason, why not put it in a concept car for the R8? The second is, of course you can, you started a discussion about diesel in a sports car. Is that possible? Of course we want to have feedback to hear what people think about it to make a decision if that is a future option or not. I think the third thing, is maybe for the US, just to get discussion about diesel in a standard car. We are sure, for a lot of reasons, diesel is a good solution compared to a gasoline engine.

Journalist: On your RS vehicles, we have been watching your competition at AMG and the M division and even to a certain extent Cadillac and Lexus. Which cars are they putting all of their performance into? Cadillac is promising some big things with their CTS-V. Why the didn't do that with the STS is up to them. What Mercedes is doing with their AMG cars, putting the same engine in pretty much everything. We have tested their C63, it is the quickest and it is the smallest of their cars. It is hard to say which one of them is their performance flagship. With your vehicles, sedans in particular, we already know what your sports car performance flagship is but where do you see yourself going with the sedans and wagons? Is there going to be any one that is sort of going to be the flagship, that gets the best spot in your gallery downstairs? Or are you going to try and separate them into distinct categories? What would those categories be?


Reil: We will not try to have one icon and say, "this is our sport RS". As you probably know, we do not have the same engine in every car like one of our competitors. This gives you the problem, in every car there is a 6.3 V8 starting in the C class all the way up. Then you have the problem that probably the cheapest and smallest car is probably the best-performing car. Our philosophy is to develop the whole package in that car line for what the customer expects, what we see in that category of car. This is the reason we are driving in an RS 4, a V8 high revving naturally aspirated engine because in a smaller car, in a light car, in a small you can position that louder. Louder not by noise but by positioning the car. It can look a little more extreme, it can perform a little more extreme, it can handle a little more extreme.

For example, the RS 6. It is a bigger car that is used more for driving three hundred miles in one direction. Take it from Munich to Frankfurt for a business meeting and drive back in the evening. You want to have superior power, superior performance but you don’t want to step out and have such a big exhaust because the noise is too high. Of course a very important thing in Europe as far as I know, completely different to the US, in Europe, the customer does not want to show what he has. For example, we sell a lot of RS model disguised as standard cars which means no RS badges on the car, removing all of the brushed aluminum which is only on the RS because European customers often want to have superior driving, higher performance. But, the customer where he has a meeting, if he is not a car crazy guy, he should not recognize what kind of car it is. This is the reason why an RS6 is a quieter design, not the big wheel houses, not the aggressive design in the front and rear like an RS 4 but a completely different engine, V8 twin turbo TFSI, automatic transmission compared to standard shift in an RS 4. So we try to define what our expectations, the expectations of the potential customer and what suits that kind of car and how should it be. Then we come to the decision, that kind of engine, that kind of design.

Journalist: Do you think that is detrimental to the brand considering a lot of the other brands, to use the American term "blingy". The designs are much more in your face where Audi is more understated? With an AMG you can always tell by looking at it that it is an AMG version other than a standard specification. Would you do an American only RS where it would be bigger wheels, bigger tires, larger fenders, to try to go after the performance American?

Reil: This is the question of the business case. We are in business for making money. I can't answer this for today. This is a thing that has to be discussed every time you start a project. How to position the car? The problem, as I said, is the expectation of the markets. There is big difference between Europe and the US.

Journalist: Yeah, we like to show it.

(Laughs)

For example, in the United States you would never see Mercedes-Benz, BMWs or Audis without any badges on them. That is common in Europe. In the US people will buy a 3 series and stick an M badge on it even though it is nothing more than a standard 328. Here, more often than not, cars with no badging at all other than the brand, BMW, Mercedes or Audi. It seems like that is a big distinction between the two.

Follow up question with respect to the performance flagships with particular respect to the RS 4. When you launched the car a couple years ago it was pretty much the only game in town when it came to hopped-up, compact, luxury cars. There wasn't a C63 yet in the States. The M3 didn't have a sedan version. The RS 4 was kind of head and shoulders above everybody. In the last two years we have seen a major crowding in the business which has left the RS 4 looking a little under-powered in some cases and way over-priced and also not quite as large visually as some of the competitors. Has that been something you have taken into consideration with our next model?


Reil: I think this is something natural in the business because the RS 4 is really at the end of its life. I think we will end production in April, as far as I know for the B7. There are only 3 or 4 weeks left of production and then that car is gone. Of course if you have a car that is right at the end of its life cycle, it is natural that the new competitors are in some discipline better than you are. I think it is an open secret that we will have an RS model on the new A4 and when that car is launched we have that life cycle benefit compared to the competitors. So they are in the middle or the end of their life cycle and our car is the brand new one like the RS 4 was 3 years ago.

Journalist:The current RS 4, when you consider B6 and B7, was very close to the end of the life cycle of the vehicle. Do you plan on expanding that a bit more in the future?

Reil: Yes. We did that already. Our fist RS 4 in 2000 had a life cycle of 14 months. That is quite short. Then the RS 6 was a little over 2 years. The RS 4 is now around about 3 years. So we are expanding that life cycle length of the RS model. Of course we will not launch a new car as an S and as an RS, it doesn't makes sense for some reasons. One is of course the RS model is not only a car to make a business case, to make money. It is also in the life cycle of the standard A4.

You need some rockets in the life cycle to keep people attracted to the car. The second reason is every high performance car, not only at Audi but every manufacturer, has quite a sharp volume cycle. If you launch a new high performance car that is a good one, a lot of people want them. Then, two years later your competitor launches their new rocket and a lot of those people say, "I want to have this one. This is the newest this is the hottest."

In those high performance categories you have a high percentage of the customers jump from one marque to the other. They want to have the newest, the hottest. That is the reason why your volume cycle on a high performance car starts by shooting to the sky and then goes down. You can't have a nearly constant volume over a time period of six or seven years. That is impossible on a high performance car.

Journalist: To follow up on that, you are currently building R8, RS 6, and RS 4. So you can build three at one time. It is probably the most you have ever built at one time. Is that good or can you up that even more?

Reil: In our facility we have the R8 as a constant volume and then we have the outgoing RS 4 and the up-ramping RS 6. We would not be able to build three different cars in the highest point of their life. This would not be possible. We have an output of about 60 cars a day and if you mix them then it is okay.

Journalist: So does the 60 include the R8s?

Reil: Yes. We build 27 R8 and the rest is a mix of RS 4 and RS 6s.

Journalist: What does that translate in terms of annual volume from your branch of the company?


Reil: We are doing about 5500 R8s. Let me go with last year… I have the numbers. Last year we had about 5000 R8s. We had 5800 RS 4s and we had pre-series of the RS 6 because the real production started in January. This year we will have about 4400 R8s. We will have 4500 RS 6s and about 900 RS 4s.

Journalist: Does it make sense to go down one more line?

Reil: What do you mean "going down"?

Journalist: A3.

Reil: You mean car line. Of course there will always be an RS 4 and an RS 6 because we have a stock of customers from the former cars. If there will be a smaller number than 4 or 6, or two letters (edit: TT), let's see what the future will bring. Of course we are having a constant look on the market. Where are our niches to go. Where do the competitors go? Where could we think to have a business case to make money. If we see a chance somewhere to make money we will go there.

Journalist: What about with an SUV? Is there any chance of that happening?

Reil: The Q7 V12 TDI is also a car of ours. It is not branded RS, but we have the development of the car. We just showed it in Geneva. The production will begin in the third quarter of this year. So we are still involved in that car. Of course in an SUV that large TDI engine makes a lot of sense. We didn't label it RS because it is not, it is a superior driving car. It has a lot of power, a lot of torque, and very luxurious but it is not an RS. What you think behind the two letters. This car had to go 8000 kilometers on the Nordschleife and we were chasing a lot of smaller, sportier cars with that big thing. We were running quite good lap times with the 2.8 tons.

Journalist: What were the lap times?

Reil: It is able to go about 8:40-8:45. This is not bad for 2.8 tons.

Journalist: Will the Q7 V12 go to the US market?

Reil: Not yet because of the emissions regulations.

Journalist: You say that you have been doing this job for 10 years. What has been your greatest success?

Reil: The car that is really close to me is the RS 4 because if I were the customer with the choice and the money the RS 4 would be my car. This is because, in every project there is a lot of blood and sweat, but the RS 4 is something special because it is just what I think my car would be.

fourtitude

Brilliant interview.

I think there is definaitely a business case for more RS cars. I'm surprised with the GMBH capacity of 60 cars/today. I know RS cars are low volume but they play a huge part in the branding image and reputation of a manufacturer. With Audi's ambitions to become biggest luxury producer by 2018 more RS cars will need to be produced in my opinion to gain more interest in different product lines (car models).

These cars should be produced in the future RS TT (more or less a certainty), RS5, RS7, RS4 (certainty). However not disolved over years through a 60/day capacity. Investment should be made into the whole process so more cars can be developed per day and at the same time.

This would put pressure on developing furture RS replacements but if Audi want to be the best then thay have to aim high

Demand plays a very important role too however. High demand and inadequate supply help with exclusivity which is difficult to juggle over a lfe cycle of a car if yiu want to make money