Audi sales could surpass sales of 1,6 million units

Audi AG expects to “significantly” beat last year’s record global sales in 2014, the carmaker’s chief executive said in an interview, effectively raising the brand’s full-year target.Volkswagen Group’s  luxury flagship sold 1.57 million vehicles worldwide in 2013 and had previously said it expects to increase deliveries this year but without giving a specific figure.

“We will significantly exceed 1.6 million units this year,” Audi CEO Rupert Stadler told Reuters on Monday at the carmaker’s base in Ingolstadt. Audi’s half-year sales rose 11 percent on year-ago levels to 869,350 cars and sport-utility vehicles, powered by double-digit growth in the United States and China.

In an encouraging sign for full-year profitability, Stadler said that first-half sales gains were helped by larger models such as the ageing top-end Q7 SUV and the A6 saloon. Deliveries of the high-end A6, A7, Q7 and A8 models rose 10 percent between January and June to 219,000 vehicles, with the flagship A8 saloon alone posting a 24 percent increase.

“Premium business is doing better amid the rather tense market situation because it’s a durable investment,” the CEO said. He declined to say how much the strong momentum among high-margin models would benefit Audi’s results this year, after profit fell in previous quarters on costs of technology, foreign expansion and new models.

Following the opening of its second Chinese factory in late 2013, Audi is spending over 1 billion euros (0.79 billion pounds) on new plants in Mexico and Brazil and may for the first time assemble more cars outside Germany than within its home country in 2014.

“The costs will continue to remain high,” Stadler said. Audi will publish second-quarter results on August 1. But he reaffirmed Audi’s mid-term target range of an 8-10 percent operating margin, lower from 10.1 percent in 2013, noting the carmaker’s spending commitments.

Another future project could be setting up Audi’s first assembly plant in the United States, the world’s largest luxury-vehicle market, which Stadler did not rule out longer term. “We will think about how things will continue after 2020,” the CEO said.

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