Investment in new models and factories hampers Audi's profit growth, despite the firm building more cars in 2013 than ever before

Audi produced a record 1.575m cars in 2013, up 8.3 per cent on the 1.455m cars built in 2012. However, the brand saw its after-tax profits fall 7.7 per cent to £3.34bn over the same period.

Rupert Stadler, chairman of the Audi board, said that a big leap in sales of the A3 (up from 125,174 in 2012 to 163,822 units in 2013) was one of the company highlights. Sales of the Q3 SUV also jumped from 106,919 units up to 152,756 in 2013. The Audi Q5 and Q7 also saw sales gains around the globe of over 20 per cent.

Audi sales in China hit 442,000 units, a rise of over 20 per cent and sales in the US rose by more than to 13.5 per cent to 158,000 units. Lamborghini and Ducati motorcycles – the other members of the Audi brand group – also saw sales rise. Lamborghini was up to 2121 units from 2083 in 2013.

Audi board members dismissed the possibility that downsizing among premium buyers - as evidenced by the big leaps in A3 and Q3 sales - would put Audi’s future profit margins at risk, even though the company is investing heavily in its larger vehicles.

Stadler, however, admitted at this morning’s annual conference at Audi’s Ingolstadt HQ that the company’s performance was being impacted by investments in new technology and new overseas production facilities. Between today and 2018, Audi says it will invest over £18bn in new products and production systems. It says it will also introduce 17 new models and model variants in 2014.

Stadler described the current spending on new facilities and production equipment for the upcoming second-generation MLB platform (which will underpin all new Audis from the A4 upwards) as “extreme down payments” on future prosperity.

Audi is also currently building new factories in Brazil and Mexico. Stadler said that Audi already has 12 plants in 10 different countries and by 2014 more Audis will be built overseas than in Germany. He added that Audi wanted to have production facilities in all the countries that have the prospect of “above average growth”.

The year has started well for Audi, with the company shifting 242,400 vehicles in January and February, pushing it ahead of BMW and making it the biggest premium brand in the world so far.

Our Verdict

Audi A3

Third generation Audi A3 has been given a mild facelift, more equipment, some new engines, a new hot model, but is the three-door version the cream of the premium hatch crop?

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Comments
3

11 March 2014
Not a peep about the A1. Telling.

Sulphur Man

11 March 2014
Sulphur Man wrote:

Not a peep about the A1. Telling.

Why?


12 March 2014
It seems crazy but maybe those masters of the automotive universe , the German premium brands are now digging themselves a large financial hole to fall into.

first BMW announces higher volumes but lower profits then Audi repeats the trick. In harsh financial terms Audi built 120,000 extra cars in 2013 and lost £4,612 on each of them. Their action plan?- more new models ( 45 IIRC) and more new factories- not a formula to improve costs.

'
Maybe in their race to beat each other Audi, BMW and MB have lost sight of adding cost doesnt always add value/pricing power and every extra model fills a smaller niche than its predecessor?

They are in a three way jam, trying to out spend each other on "quality", trying to improve fuel economy to meet the EU CO2 rules and, to do that, trying to cut weight and power whilst still commanding a large price premium versus volume cars with the same power and size.

CADDY06

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