Audi steps up investments to $30 billion through 2018, to stay ahead of competition
Volkswagen Group’s Audi AG, said on Friday that it would invest 22 billion euros, or more than $30 billion, through 2018, a record for the company. Most of the investments will be used to develop new models and new technology like more fuel-efficient engines. The company will also expand its international production network as it strives to sell two million models annually by 2015, up from more than 1.5 million this year.
While mass-market carmakers including Ford and General Motors’ Opel unit have lost billions of dollars in Europe and have had to close factories, luxury German carmakers have been operating at close to full capacity as they serve demand in the United States and China. Even in Europe, German carmakers have had less drastic sales declines than mass-market car brands, in part because the economy in their home market has remained strong.
“We are launching our next stage of growth,” Axel Strotbek, a member of the Audi management board responsible for finance and organization, said in a statement. Audi, which this year has accounted for 40 percent of the profit of its parent company, has been aiming to overtake BMW as the market leader in the high-end car market. BMW sold nearly 1.8 million cars through November, including the Mini and Rolls-Royce brands. Audi passed the 1.5 million mark this year in early December.
Mr. Strotbek said 70 percent of the new investment would go to new Audi vehicles, including an expansion of the product line to 60 models by the end of the decade, from 49 at present. More than half of the money will be invested in Germany at the company’s facilities in Ingolstadt in Bavaria and Neckarsulm, in southwest Germany, north of Stuttgart.
Audi, which has been trying to expand sales in the United States, is building the first Audi factory in North America in San José Chiapa, Mexico. The company plans to produce the Q5 S.U.V. in Mexico beginning in 2016. Audi also said it was close to beginning production at a new plant in Foshan, China, the company’s second plant in the country.
Some of the new investment will be used to expand the company’s worldwide work force of nearly 70,000. Audi, like all carmakers under regulatory pressure to cut emissions and increase fuel efficiency, said it was particularly interested in people with expertise in electric propulsion or building cars that weigh less. “We want to hire the best in the industry to strengthen areas such as lightweight construction, connectivity and electromobility,” Thomas Sigi, a member of the Audi board responsible for human resources, said in a statement.