Audi to splurge €13 billion on growth plans

AUDI has committed €13 billion ($A 16.5 billion) to developing new models and extra production facilities – including new plants in Mexico and China – over the next four years as it pursues its Strategy 2020 growth trajectory that it hopes will make it the number one luxury car brand by the end of the decade.

Volkswagen’s luxury car division says it will spend more than €2 billion a year on new products, including technologies such as lightweight construction methods, electric mobility and ever more efficient conventional engines.

The company plans to sell at least two million vehicles a year by 2020 – up from about 1.5 million in 2012 – “to become the perennial number one premium brand in the world”.

However, arch rival and current global sales leader BMW is not planning to hand over the crown easily. It says it will sell a record 1.8 million vehicles in 2012 and is planning for more next year, market conditions permitting.

Mercedes-Benz currently trails in third place, with projected 2012 sales of about 1.3 million vehicles – up about 5.0 per cent on last year.

Although large sums are being spent on new production capacity in China, Mexico and Hungary, Audi’s home bases of Ingolstadt and Neckarsulm will still get more than half of the investment over the next five years.

Audi concedes sales conditions in Europe remain challenging, but Audi chief financial officer Axel Strotbek said: “We will keep investing large sums to pursue our growth strategy.” Audi of America sales were on record pace to the end of November, up 18.6 per to a 124,469 units, while Chinese sales have forged ahead by more than 30 per cent, to more than 370,600 vehicles in the first 11 months of 2012.

In Australia, Audi’s breakneck growth of recent years has slowed in 2012, with sales slipping by 1.5 per cent year to date.

Audi is expanding production with its first North American plant in central Mexico, at San Jose Chiapa, where Audi will start building Q5 SUVs for North America and export markets by 2016.

The new Chinese plant is being built at Foshan in partnership with China’s FAW, and should be ready to start building cars in early 2014, In Hungary, Audi is expanding its capability at Gyor where a new body manufacturing shop, paint shop and press shop will be open for business in 2013.