Friday 23 March 2018

Audi keeps its foot on the gas pedal with €22bn spending plan

Factory workers inspect cars on the assembly line during the opening of a Audi factory in Budapest
Factory workers inspect cars on the assembly line during the opening of a Audi factory in Budapest

Tom Lavell

AUDI plans to spend €22bn through 2018, pushing models such as electric vehicles to gain the top spot in the premium segment.

About 70pc of the total will be invested to develop new models and technology, the Ingolstadt, Germany-based carmaker said.

Audi targets selling two million cars and sport-utility vehicles annually after achieving a goal of delivering 1.5 million autos in 2013, two years ahead of its original plan.

"We are now decisively steering toward our next milestone," chief executive Rupert Stadler said. "This is why we're keeping our foot on the gas pedal regarding investments."

The budget is equivalent to spending €4.4bn a year, an increase from a previous plan that called for investing €4.3bn annually on new models and expanding production capacity.

The VW unit aims to overtake BMW as the world's biggest luxury-car producer by the end of the decade.

BMW is seeking to fend off challenges by Audi and Mercedes-Benz with its own expansion. The Munich-based carmaker is introducing 25 models in 2013 and 2014 including 10 vehicles, such as the Rolls-Royce Wraith, that have no predecessor.

Daimler's Mercedes, which ranks third in the luxury segment, plans 13 all-new models by the end of the decade, while Audi is widening its SUV line-up.

Stuttgart-based Daimler said it would invest €200m in a vehicle-technology and testing centre in the southern German town of Geisingen-Immendingen.

Audi plans to increase its product range to 60 models by 2020 from about 49.

The third generation of its TT coupe is scheduled to go on sale next year, joining newly introduced electric and natural gas-powered variants of the A3 Sportback, the carmaker said.

Audi will also add to its SUV line-up with the subcompact Q1 in 2016. To meet anticipated demand, the manufacturer is adding production in China, Brazil and Mexico, in addition to upgrading its German plants.

"With this investment programme we are launching our next stage of growth," chief financial officer Axel Strotbek said. (Bloomberg)

Irish Independent

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