Audi AG will introduce 17 new or revamped models this year and will proceed with the production of an electric version of the R8 sports car in an attempt to get ahead of the automaker’s main competition—BMW AG.
In his speech at Audi’s headquarters in Ingolstadt, Germany, CEO Rupert Stadler said that they will increase deliveries in Europe and other regions of the world. Stadler also mentioned that he expected their 2014 revenue to grow and predicted that registrations in China will surpass 500,000 units for the very first time. China is the German automaker’s largest market.
Audi, which is the biggest earnings contributor of Europe’s biggest automobile manufacturer Volkswagen AG, will be investing 22 million euros (or $30.4 billion) in the next five years. 70 percent of the said amount will be allotted to new products and technology, and the rest will go toward the expansion of global manufacturing capacity. New production plants will be built in Brazil and Mexico.
The company’s operating profit faltered by 6 percent in 2013 to 5.03 billion euros ($6.97 billion) but its revenue increased 2 percent to 49.9 billion euros due to higher auto sales. Operating profit as percentage of sales was 10 percent, which exceeds its long-term target range (between 8 to 10 percent).
Last year’s strong sales was attributed to the release of the Audi A3 compact. The car boosted sales by 8 percent to 1.58 million units. A 32 percent increase in the deliveries of the Q7 sport-utility vehicle also contributed to Audi’s sales performance. The company will soon launch the model’s sedan version; it is expected to hit showrooms in the United States and China this year.
Audi recently introduced the revamped version of its TT sports car at the Geneva Motor Show and will be introducing the sporty S1 subcompact soon. The latter will be included in the carmaker’s lineup in the second quarter.
Audi plans to gain momentum on its biggest rival, and the company seems on track to lead the luxury market with its latest success. In the first two months of 2014, Audi delivered more cars than BMW, making it the global leader in luxury auto sales.
Audi became the world’s best-selling luxury carmaker by selling 242,400 units through February. Its total sales surpassed BMW by 383 vehicles. In the same period last year, BMW sold 429 units more than Audi. BMW has been number one in the luxury auto segment for nine consecutive years.
Audi is crucial in Volkswagen’s strategy to dominate the auto industry and assume the top spot in sales. Toyota Motor Corp. is the current leader in auto sales, and VW plans to take the top spot by 2018.
Last month, VW reported that its 2013 fourth-quarter profit jumped 18 percent to 3.11 billion euros. The rise is attributed to the record sales of both Audi and Porsche offsetting expenditure on new model development and production expansion.
VW expects its 2014 operating margin to be between 5.5 percent and 6.5 percent. Its operating margin last year was 5.9 percent. Moreover, the company foresees more revenue this year, within the range of 3 percent compared from the previous year. Deliveries are also expected to grow ‘moderately.’