Audi IS second tier. Not in terms of the quality of their products, but in terms of overall US presence, popularity and sales. Audi has itself to blame to a certain degree. It has to do with how aggressively you market your product to a given population. Audi has never made the US a top priority. They don't design cars with the US market in mind, they don't bring all their best products to the US, and products are often delayed. Look at the halo RS line, and what a poor presence they have in the US compared to M and AMG. Audi should have an RS3, RS4, RS5, RS6, RS7, RSQ5, RSQ7, all available at all times. Audi has no flagship high performance SUV, when virtually EVERY other premium German brand does. Their online configurator also sucks, and their dealership numbers are well below MB, BMW, Lexus.
Another company in the same boat is Infiniti. Compared to their main rival, Lexus, I actually think they make better, and more interesting products, but the presence, marketing and product development simply is not in the same league. Lexus and Infiniti both entered the US market around 1990 IIRC, but Lexus took off in a way that Infiniti never did.
So yes, from the US business perspective, Audi is second tier, and I think this is what is being referred to. I don't think the are referring to the performance, design, or build quality of the cars themselves.
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