Considering the dire situation in the European car market, Audi’s 2012 financial results read like a fairytale. Around 1,45 million Audis were sold last year, the company made a Euro 5,4 billion operating profit and achieved an operating return on sales of 11 per cent. Net profit is only down 2 per cent on last year, which given the current state of the motor industry, is a victory in itself. Every 22 seconds, somewhere in the world, a new Audi is sold. Big daddy Volkswagen can’t be too unhappy with all of this, seeing as Audi is reportedly its main profit driver.
In terms of business, then, Audi is well on track to achieve its target of being the world’s number one premium brand before its set target of 2020, called, in typical no-nonsense fashion, Strategy 2020.
But the situation in Europe looks bleak, and the worldwide outlook is hardly rosy, too. Plus, let's not forget, the competition isn't standing still. BMW posted sales of 1,54 million vehicles last year and reported a 3,5 per cent profit increase... Audi CEO, Rupert Stadler, predicts a tough 2013 and did not give a firm forecast on profits for this year. You’d expect that the purse would therefore be snapped shut for the foreseeable future, but instead Audi is embarking on the largest investment plan in its entire history.
The company will invest around Euro 11 billion by 2015, expanding its model line-up, production network, developing future technologies and recruiting thousands of new employees (1 500 in Germany alone). It is building a new factory in San Jose Chiapa, Mexico to manufacture the Q5 from 2016 and another new factory, this time in Foshan in China, will open later this year. It is also expanding its plant in Gyoer, Hungary. In short, the company is gearing up for massive growth, globally. Further proof… In China, where Audi sold more than 400 000 vehicles last year, it will open on average one new Audi dealership each week for 2013.
Fueling this growth is, of course, product. While Audi did not reveal any new models at its Annual Press Conference in Ingolstadt this week, it will do so later this year. Most of these models will be drivers of volume, with the biggest impact likely to be made by the new A3 Saloon, which I was fortunate enough to look at and sit in (but not photograph), this week. Only slightly longer than the A3 Sportback and riding on the same wheelbase, the A3 Saloon is a sporty, beautifully “chiselled” design. It only shares its grille and headlamps with its hatchback sibling. This model should arrive in South Africa early next year.
Also rumoured to be on the way (in Europe) are a new generation of Q (SUV) vehicles, including an all-new Q7, a larger Q9 spin-off and Q4 and Q6 crossover variants. The RS performance division is also rapidly expanding, with the RS5 Cabriolet, RS Q3 and RS7 Sportback all confirmed for South Africa.
South African performance
In a recent interview with CAR, Audi South Africa’s Ryan Searle emphasised the brand’s investment in its dealerships, and the profitability of those dealerships – crucial to the 2020 Strategy. Audi SA is rolling out a number of high-profile “terminals” that fit the premium feel of the Audi brand. In total, Audi SA already has 23 dealerships that are exclusive. Following 2015, only around seven “dual-brand” dealerships are likely to remain. “We’re on a very dedicated path to deliver exclusivity,” said Searle. Audi SA’s success has not gone unnoticed – it last year achieved 20 per cent of the local premium market for the first time. It also recently scooped up CAR magazine’s “Motor Company of the Year” title.
Audi to become more “emotive”
Although there have never been doubts about the quality and performance of Audi’s modern line-ups, the brand has often been criticised for being too derivative in its design. The company has already officially communicated its intentions to better differentiate its luxury cars from the sportier models and also to create a more distinctive face for its SUVs and crossovers.
At a gala event prior to this week’s Annual Press Conference, I got the sense that the brand had a few design aces up its sleeve… Audi, of course, forms part of the larger Audi Group, which incorporates Lamborghini and, more recently, Ducati motorcycles and Italdesign Giugiaro (the famous Italian design house). During the course of the evening a subliminal message became clear. The group is becoming more Italian, more passionate. With the more direct involvement of, for example, the legendary Giorgetto Giugiaro, expect future Audis to exhibit more flair.
Audi’s 2020 Strategy goes beyond the traditional. From synthetic fuels to future urban planning, autonymous driving and even virtual dealerships, it’s leaving no stone unturned in its quest to claim the number one spot. The past 12 years or so may have seen the company double its sales and rapidly improve its brand value. But I get the sense its past achievements are nothing compared with what lies ahead.
Check out this video showing Audi's Piloted Driving technology in action.