Thursday 13 March 2014

Audi sales to top 2million by 2020?

Audi will increase its model range from 50 to 60 by 2020 and raise output from 1.57 million last year to two million.

An increasing proportion will be made outside Germany – this year for the first time external production will outstrip the number of cars built in the company's homeland.

Audi also plans to increase its tally of manufacturing sites from 12 now to 14 by next year, and to grow the employee head count from just under 74,000 to 80,000 by 2018.

Audi launched 15 new models or derivatives in 2013 and this year is planning another 17. They include an all-new replacement for the TT and high-performance versions of the three- and five-door A1 and the A3 Cabriolet.

Further ahead, there will be a fourth SUV - the compact Q1 - and replacements for the A4 and A6 families, the A8 luxury saloon and the Q5 and Q7 SUVs.

Next year, Audi will also replace its flagship sports car, the R8, with a new model sharing some technologies with the Lamborghini Huracan. A hybrid version, the R8 e-tron, will be offered "upon customer request". The all-electric version of the current R8 was dropped in 2013.

Head of technical development Dr Ulrich Hackenberg claimed Audi is "working on future derivatives of the TT" beyond the coupe and roadster which were offered with the first two generations of the car.

Two have already been shown - the Allroad Shooting Brake concept, which appeared at Detroit in January, and the 420bhp quattro sport concept revealed at Geneva a week ago and already confirmed for production.

"We are looking to see if there is more we can do," said Hackenberg. "Could the TT be extended as a family car?"

Audi is also developing a brand-within-a-brand with its new high-efficiency ultra models as rivals for BMW's Efficient Dynamics range.

Featuring powertrain and aerodynamic tweaks, they are expected to be particularly attractive in markets blighted by high fuel prices or CO2-based taxation. There will be 13 on offer by the end of this year, including one based on the new TT.

In Germany, Audi has recently added the A3 g-tron, which can be fuelled by petrol, natural gas or e-gas created by a chemical process from wind power. Later this year it will launch the A3 e-tron, a plug-in hybrid with a range on electric power of up to 32 miles and CO2 emissions officially rated at 35g/km.

Hackenberg made no reference to diesel car sales growth. However, he is understood to believe that 50 per cent of the improvements necessary to hit economy and emissions targets will come from the development of combustion changes, 20 per cent from reducing weight and drag and developing more efficient vehicle systems, with the remaining 30 per cent to be contributed by electric, hybrid and - eventually - fuel-cell powertrains. 

In this respect, Audi is planning to regain its crown as the manufacturer of the most streamlined cars on the road as part of its plan to reduce fuel consumption and emissions by 25 per cent before 2020.

It will build a third wind tunnel dedicated solely to the brand, which will also help the company to keep pace with development work on its ever-increasing range of new products.

                                     Profit drop on 2012

Audi has again reported record sales in 2013 and out-performed the market in every region, if not every country, in which it operates.

Yet there is also a cautionary note with a drop in profits compared with 2012.

The company's global sales reached 1.57 million last year, a rise of 8.3% on 2012, helped by the new A3 Sportback and saloon and the trio of SUVs (Q3, Q5 and Q7). Audi is now selling 600,000 cars a year more than at the start of the decade.

"We are two years ahead of our volume development targets," noted chief executive officer Professor Rupert Stadler. "And we made a very good start to the year 2014. In January and February we delivered a total of 242,000 automobiles, surpassing the prior-year figure by 9.3%."

Europe remains the company's premier region, contributing 732,000 to the 2013 total – a rise of 5% in a market which, overall, was down.

China is closing fast, with sales of 492,000, an increase of more than 20%. Audi will become the first premium brand to sell more than half a million cars in a single year in China in 2014.

The improvement in the US was also significant – up 13.5% to 158,000, putting Audi on course to achieve the annual target of 200,000, set by the VW Group main board, within the next four years.

Finance director Axel Strotbek expects "a slight growth" in the overall market this year and an increase in Audi revenues to more than €50 billion for the first time – last year they were €49.9 billion, up on the €48.7 billion of 2012.

"We are investing even more in new products and technology," declared Strotbek. “Some 70 per cent of investment will be on product and technology.”

"At the end of 2013 we approved the biggest investment in our history. By 2018 we plan to invest a total of approximately €22 billion," he added.

This is increase in investment comes despite a drop of 6.2 per cent in profits last year, from €5.3 billion in 2012 to just over €5 billion.

Strotbek offered several factors to explain the drop in profitability: down payments on new plant and equipment in Hungary, Mexico and Brazil; low interest rates, currency variations; and finally the high investment in research and development, which equates to almost 8% of revenue.

Audi is pushing ahead with advancements in lightweight engineering (aluminium and carbonfibre bodies), lighting technology (matrix LED and laser-beam headlights), connectivity (deals with Google and Apple) and autonomous driving (available at speeds of up to 37mile/hour by the end of the decade) while attempting to a achieve major fuel consumption and emissions reductions through developments to combustion engines and electrified drivetrains.                                                                                              ∎

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