GO
GoAutoLogo
MENU

Make / Model Search

News - Audi

Audi makes billions

Who’s in the money?: Audi posted a profit of more than three billion dollars last year – after tax.

Booming large-car sales and Chinese market send Audi profits soaring

2 Mar 2012

A STAMPEDE for Audi’s higher-priced models – and astonishing growth in China – ignited a 69 per cent jump in the German premium car manufacturer’s after-tax profit in 2011.

Net profit jumped from €2.63 billion ($A3.24b) to €4.44bn ($A5.47b) after revenues rose 24 per cent to €4.10 billion ($A5.05b).

The result makes Audi one of the most profitable companies in the car industry, but there are some worrying clouds over the outlook for 2012 and directors would only say they are planning for the 2012 result to be “on a par” with the record 2011 figure.

It is Europe that has them worried.

“There are imponderables in terms of the economic fundamentals in Europe,” said chief financial officer Axel Strotbek.

“We can’t make a forecast for the year as a whole because things change so quickly, so it would be wrong to make a concrete statement at this time of the year.”

However, the numbers released yesterday showed that many things went right for the company in 2011.

The company released 12 new models in 2011 as it renewed its range and expanded into new niches, and this helped push Audi’s unit sales up by 19 per cent to a new record of 1.3 million vehicles.

Audi chairman Rupert Stadler said directors were confident the company would reach its stated target of more than 1.5 millions vehicles a year by 2015 earlier than anticipated.

But he warned that there was no guarantee of sustained growth at recent rates.

“We all know that there is no such thing as a perpetual motion machine, something that will continue forever like this, but if you have certain basic targets and if you have a certain basic attitude I think you are bound to be successful as a company.”

Audi sales grew faster in 2011 than the overall vehicle market and the company achieved record sales in 50 different countries. In every one of its 10 top markets, it grew by more than 10 per cent.

The jewel in the crown was China, which has become Audi’s biggest market, eclipsing Germany. Sales in China went from representing 25 per cent of total turnover in 2010 to 38 per cent in 2011.

China bought 313,036 Audis in 2011 – up 37 per cent – and the company has already started building a second plant with its joint venture partner FAW that will expand production in China to 700,000 units a year by 2015, more than half the current production capacity.

Reflecting the importance of the Chinese market, Mr Stadler said Audi would be establishing a design and development centre in Beijing.

Demand for the larger C and D-segment Audi models supercharged the company’s profits.

“Positive factors included the high popularity of the new A8 (up 72 per cent to 38,500), the new A6 and the new A7 Sportback,” said Mr Strotbek.

“The revenue share of vehicles in the C and D segments has therefore climbed from 25 per cent to a current 38 per cent in just three years,” he said.

While there is some uncertainty about the outlook for the rest of 2012, directors remained confident there was plenty of growth left available for the company.

“We assume that the premium market is going to grow much more strongly in the next few years than the volume market,” said Audi director of marketing and sales Peter Schwarzenbauer.

“Total market worldwide in 2011 was approximately 62 million vehicles. We assume that by 2020, that will grow to 85 million vehicles, so that means an increase of 37 per cent.

“In the same time, the premium market will go from 5.6 million to 8.7 million units, an increase of 55 per cent, so we assume that the possibility to successfully market premium cars in the future will very much depend on the general conditions.”

Those conditions have been patchy for a while in Europe because of the economic woes surrounding Greece.

Mr Strotbek paid tribute to German chancellor Angela Merkel for pushing through stricter new conditions for members of the European currency union.

“Angela Merkel did a great job in putting on the agenda first fiscal policy in Europe, because this was one of the major mistakes in starting up the Euro 10 years ago.

“Right now, I personally do not perceive a break-up, because the costs from an economic point of view and also the damage from a political point of view would be so disastrous that everything has to be done in Europe to stick to that fiscal step.”

The Road to Recovery podcast series


Click to share

Click below to follow us on
Facebook  Twitter  Instagram

Audi articles

Motor industry news

GoAutoNews is Australia’s number one automotive industry journal covering the latest news, future and new model releases, market trends, industry personnel movements, and international events.

Catch up on all of the latest industry news with this week's edition of GoAutoNews
Click here