Audi plans to invest 24 billion euros in 4 years on global expansion

Wednesday, Mar 11, 2015

German luxury car maker Audi plans to invest 24 billion euros (about Rs 1.61 lakh crore) over the next four years to enhance its global production network, including two new plants in Mexico and Brazil, and launch new models.

"In 2014, we invested 4.5 billion euros, one quarter more than in the previous year. By 2019, we will invest another 24 billion euros," Chairman of the Board Management of Audi AG Rupert Stadler told reporters here.

The focus will be on technical innovations and new models, he added.

All investments would be funded out of cash flow from operating activities.

"More than 70 per cent of this investment will flow into new technologies and models," Member of the Board of Audi AG Axel Strotbek said.

The investment will also go into strengthening production centres across the globe, including new plants in Mexico and Brazil, he added.

Besides, the company will begin its product introductions from this year itself by introducing the new Q7, new R8 and new A4 family.

The maker of popular luxury models like Q5 sports utility vehicle and A4 sedan, aims to add another eight new models to take its total tally of products to 60 by 2020.

"The new models Audi Q7, R8 and A4 are the highlights of our model initiative in 2015," Board of Management Member Ulrich Hackenberg said.

On future product launches planned by the company, he said: "In early 2018, we will launch a battery-powered sports activity vehicle in the large premium segment with a range of more than 500 kms."

This vehicle will be built on the second generation of the modular longitudinal platform, he added.

Further, as part of its global growth plans, the company intends to hire more than 6,000 new employees across various global markets in the current year.

"This year, we plan 6,000 recruitments: 2,000 at our international sites and around 4,000 in Germany," Stadler said.

At present, the Ingolstadt-based company employs over 80,000 people worldwide. It sold a total of 17.41 lakh Audi brand vehicles last year, an increase of 10.5 per cent over the units sold in 2013.

On Audi's sales outlook for the current year, Stadler said: "We want to grow once again in 2015 -- stronger than the world market and with expansion in all regions."

The company wants to achieve the next strategic milestone of two million deliveries before 2020, he added.

Commenting on the financials of the company, Stadler said the luxury car maker posted revenues of more than 53 billion euros last year, a growth of 7.8 per cent over 2013.

Operating profit of the company rose to 5.15 billion euros in 2014.

On the outlook for 2015, Strotbek said: "Despite the ongoing high level of investment, we are maintaining our ambitious profitability targets, and plan to achieve an operating return on sales within the strategic corridor of 8-10 per cent again this year."


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