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Michael Dubinsky

Michelle Risman
Dahee Will
Marcela Ampon
Ken Lim

Illuminating The Path Ahead: LED & Audi

August 1945. America dropped Fat Man and Little Boy over Hiroshima and
Nagasaki. Germany was still dealing with the shock of losing World War II. Millions of
soldiers all over the world were returning home for the first time in years, to family
holding back tears at the cusp of joy. And over here in Detroit, a new spirit of optimism
never before seen was being born.
Wartime sanctions had rationed all sorts of materials in the US, from butter to
chromium, crippling or repurposing industries. Until the onslaught of the war, the US
auto industry was unrivaled the world over, producing the most opulent, over
engineered cars ever made. Cadillac and Lincoln were fighting for dominance with the
first V16s to the market, while on the opposite end of the spectrum; the Dodge brothers
released some of the first durable trucks to compete with Henry Fords model T, the
Tin Lizzie. The constant competition lead to unparalleled innovation and price
competition in every sector of the auto market. The war shut down most auto factories,
converting GM and Ford plants into powerhouses of production for Jeeps, tanks and
bombers.
As soldiers returned home and factories emerged from the automotive slumber
of 6 years, demand for cars outgrew productions by millions of unfulfilled orders. By
1951, the US auto industry was producing over 7 million cars domestically. The climate
for competition, especially in luxury cars, shifted from essential innovations like engines
and transmissions to more gratuitous gadgets like power steering, power seats,
convertible hard tops, dual headlights, and pneumatic suspensions.
In Europe, due to the effects of the war, industry focused more on quantity than
it did on the actualization of trinkets. Utilitarian cars like the Citroen 2 CV defined the
landscape, giving millions of people their first taste of automotive freedom. Even luxury
marques like Mercedes-Benz, Panhard, and Jaguar focused on quality of craftsmanship
and durability over the development of unnecessary features.
When sold in America, European luxury did not initially bode well. For roughly
the same price as Cadillac and Lincoln, Mercedes and Jaguar offered austere interiors,
weak engines, and small size. Until 1973, the US auto industry maintained this status
quo, using superior economies of scale to offer more features, horsepower, and steel
per dollar than any other industry on earth.
However, even the greatest giants can be brought to their knees when enough
circumstances go wrong in their direction. The 1973 Arab oil embargo, caused by
extraneous factors in the Middle East, quadrupled the price of oil per barrel between
October 1973 and October 1974. Combined with the 1972 EPA Clean Air Act, which
mandated cleaner automotive emissions, consumer tastes shifted overnight. Quality in
engineering, fuel economy, small size, and thoughtfully designed ergonomics took
priority over trinkets, size, and badge.
Numbers reflect the change, with Mercedes doubling sales in the US in 1975,
Volkswagen introducing Audi in 1970, and BMW enjoying considerable success based on
the 2002 throughout the 70s. To this day, US luxury marques have been fighting off the
stigma they gained in the 1970s for producing slow, obtuse cars laden with features
that were irrelevant to consumer tastes and needs.
The luxury automobile market of today is extremely competitive, with each
model year seeing new features of every distinction, from powerful engines to the
quietest interior volumes. Distinction is important, with US makes still catching up in
building a unique niche. The German luxury marque Audio, wholly owned and
controlled by the Volkswagen Automobile Group (VAG), has traditionally held last place
in the Big 3 German market place, facing significant lag behind BMW and Mercedes.
However, from model year 2008 to model year 2013, Audi AG experienced sales growth
of 157%, going from roughly 1 million worldwide sales in 2008 to 1,570,000 in 2013,
according to the 2013 Audi AG annual report.
Aside from a generally improved world economy and constantly growing
consumer demand in every market within the last two years, Audi has three factors that
help differentiate their product from their competitors, in terms of technology. What
makes Audi cars unique is their aluminum construction, available Quattro all-wheel
drive system, and available LED daytime running lights. However, only one of those
technologies is distinctly visual, and that credit goes to the LED headlights, the
technology that helps most separate Audi from its competitors on the open road, and
gives it a distinct advantage that can be visually identified.
The application history of LED headlights in automotive applications is open for
dispute, but there are two official stories for LED head and taillights. Cadillac debuted
LED taillights on the 2000 Catera, showcasing the historic confusion of US luxury
following 1973 - spurs of innovation first, only to be abandoned and forgotten about in
the pursuit of higher profits. The first LED headlights debuted on the 2006 Lexus LS600h,
a full-size luxury hybrid sedan. However, typical of Toyota conservatism, Lexus failed to
capitalize on innovation behind their headlights, and the credit of trendsetting a major
advancement remains unattributed to Lexus years down the road.
Beginning with the 2003 Audi LeMans Quattro concept, and continuing with the
2004 Audi RSQ concept featured in the Hollywood film iRobot, Audi demonstrated two
cars using LED lighting as their primary lighting. The production debut of LED headlights
on an Audi vehicle came in 2008, on the Audi R8, a mid-engine super car based on the
LeMans and RSQ concept designs, and designed in conjunction with VAG stablemate
Lamborghini. Using Hollywood again for promotion, the R8 and its piercing, aggressive
LED headlights were featured in the 2008 film Iron Man, which coincided with the
reboot of Robert Downey Juniors career, and that of Audi AG in the US. In the last 5
years, LED lights have proliferated as a design element to virtually every major
automaker in the world. However, on the open road, they arent known as LED lights.
They are known as Audi lights. Similar to nearly unanimous brand loyalty enjoyed by
Heinz in the condiment industry, and Kleenex in the home care industry, Audi has
become synonymous with the unique look, feel and style and of LED lights in
automotive applications.
Light Emitting Diodes (LEDs) were originally created in 1968 and evolved into
seven point matrix screens that we commonly see on everything from watches to
calculators. The Department of Transportation approved their usage in automotive
applications in 1979, ushering in an era of digital dashboards.
For Audi, LEDs solved two problems. They created a unique brand identity that is
visible from the road, and they illuminate the world clearer, further and crisper. LED
headlights have become a signature of the Audi design ethic, says Brad Stertz, Audi of
Americas Communications Manager. The smaller, more flexible profile can help lower
the hood of a car, which helps open up design and aerodynamics possibilities. LED light
consume up to 80% less energy than conventional halogen bulbs, and they produce
nearly twice the light, measured in lumens, going from 1400 lumens to nearly 3000 on
certain high end models.
Audis eagerness to implement LED lights into their vehicles has allowed them to
differentiate their cars from competing manufacturers. Audi was able to develop a
signature look based around LED lights - a half smirk that nestles in an ultra bright HID
bulb in the corners to create an aggressive, distinct corporate identity that helps
separate their vehicles from competitors. Combined with the signature Audi
widemouth grill, Audi vehicles are easily distinguishable in the market, even amongst
constantly increasing usage of LED lights amongst competitors.
BMW and Lexus were among the first rival manufacturers to implement LED
lights into their products. Around 2010, most Lexus models became standard with LED
accent lights halfway through their model cycle. BMW, famous for ringed halos on
their headlights, converted to LED halos for more distinct design. However, the long
term has shown that neither brand has been able to successfully cultivate a design
identity based on LED lights compared to the Audi brand.
In typical German fashion, the mistakes that Audi made in the implementation of
LEDs to their cars leads solely to price. Part of what helped brands like Lexus and Acura
establish a foothold in the US market in the 1980s was the value that they offered when
compared to their competition. A 2014 Lexus IS comes standard with Bluetooth, backup
camera, full leather upholstery, LED accent lighting, and dual zone climate control for
about 90% of what a 2014 A4 comes with. That unicorn bargain basement A4, however,
is front wheel drive, does not feature LED lights, Bluetooth or other expected features
for the price. Customers are still hesitant to flock to the Audi brand because the popular
features like Quattro AWD and LED lights are grouped into expensive options packages.
Customers feel like they are being forced to pay into unnecessary packages in order to
get the few features that they desire. This leads them to cross-shop Japanese and
American competition, which may lack in finesse and prestige, but compensates by
providing desired features as standard and for more competitive prices. In essence, Audi
has utilized LEDs as a driver for customer acquisition. However, their reluctance to
include LED lights as standard or as a stand alone feature has customers questioning the
value proposition of the purchase as a whole.
As economies of scale will inevitably bring prices for LED lighting down, they will
proliferate to most cars, as did airbags and navigation screens in the generations before.
In the time being, Audi has successfully harnessed the distinct look afforded by LED
lighting in order to cultivate a strong, aggressive, and enviable brand identity, from the
brochure to the racetrack. Despite their price disadvantage and complex German price
structure, LED lights have successfully served to elevate the Audi brand to a level of
technological superiority and industry leadership never before seen.