Audi targets BMW with 7.3 billion euros in new product investment - Confirms Q5 hybrid end of 2010

Audi Q5

By Zack Newmark
December 29, 2009 5:00 am
Filed Under: Audi, German, Production

Volkswagen will invest €7.3 billion in Audi over the next three years to position their luxury brand to better compete against BMW and Mercedes-Benz. The investment will help Audi put eight new models on showroom floors by 2015, bringing the total number of vehicles offered to 42.

Amongst the new cars is the Audi Q5 Hybrid, the companies first electric/petrol vehicle. The hybrid SUV will be unveiled by the end of 2010 with a 2011 market release.

"With our planned investments in new products and mobility concepts, for example electric propulsion, we are creating a basis for our company's future growth," said Audi board member Axel Strotbek in a press release.

"We will be in a position to finance all our planned investments from our operative cash flow."

Of the investment money, €5.9 billion will go towards research and development. The luxe brand will be focusing on "new product development, further optimization of conventional drivelines and the development of electric and hybrid models." German plants in Neckarsulm and Ingolstadt will benefit the most from the funds.

Also being introduced next year is the Audi A1, A7, A8, and R8 Spyder. The all-electric Audi e-tron sportscar is due by the end of 2012.

Audi expects to sell about 925,000 vehicles worldwide this year, but hopes to raise that figure to 1.5 million by the end of 2016. For 2009, BMW set their target at 1.02 million units, with Mercedes aiming for 950,000. Both BMW and Mercedes have similar expanded targets by mid-decade.

Press Release (Click to expand)

Audi continues to invest strongly in the future

7.3 billion euros total investment from 2009 through 2012
Around 5.9 billion euros for new products and future technologies
Number of models to increase from 34 now to 42 in 2015

Audi will continue to invest heavily in new products and forward-looking technologies in the future: plans for 2009 through 2012 envisage total investments of 7.3 billion euros for fixed assets.

In coming years the Audi Group will continue to invest strongly in its future. Approximately 5.9 billion euros, in other words about 80 percent of its total investment in fixed assets, will be devoted to new product development, further optimization of conventional drivelines and the development of electric and hybrid models. By 2015, the Audi brand will have enlarged its product portfolio from currently 34 to 42 models. "With our planned investments in new products and mobility concepts, for example electric propulsion, we are creating a basis for our company's future growth," says Axel Strotbek, Member of the Board of Management for Finance and Organization at AUDI AG.

Next year Audi will launch a series of new cars. The A1, A7, A8 and R8 Spyder will be added to the product portfolio during 2010. At the end of 2010 Audi will unveil the Audi Q5 Hybrid, which will reach the market at the start of 2011 as the brand's first full hybrid model. As Strotbek points out: "We will be in a position to finance all our planned investments from our operative cash flow."

At the German locations and elsewhere, future policy is now being implemented: from 2009 through 2012 approximately 3.8 billion euros will be invested at the Ingolstadt and Neckarsulm plants. "This is a firm commitment to our German facilities. Audi is facing the technological upheaval in the automobile world in a farsighted way. The will to work and high qualifications of employees at our German plants are a firm foundation for the necessary changes," states Peter Mosch, Chairman of the Audi General Works Council.

About 2.5 billion euros will be invested at Ingolstadt and about 1.3 billion euros at Neckarsulm. A new transmission and emissions center will be opened at the Ingolstadt plant, and other investment priorities will be stamping tools for the new Audi A1 and the manufacturing structures for the A3 and A4 models. The investment focus in Neckarsulm will be on the A6, A7 und A8 models and new engine-function test rigs.

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Tags: Audi A1, Audi A7, Audi A8, Audi R8 Spyder, Audi Q5 Hybrid, Audi Q5, 2011 Audi Q5 Hybrid

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Comments (page 1 of 2)

rcw

December 29, 2009 10:24 am

This is all fine and dandy, and I love Audis, I really do. As a matter of fact, the 1st and second generation Audi 5000 is still one of my favorite cars, however, until Audi can ride/handling dynamics that are closer to a BMW, they will still have a tough job taking all of the thunder away from MB and BMW, in my opinion. I think the nose heavy feeling is part of what has always made Audi secondary or last to the leading brands, in the eyes of true enthusiast.

CDspeed

December 29, 2009 11:30 am

rcw......Your right. I love to test drive new cars and I've driven Audis, BMWs, And Mercedes in the same day. BMWs do handle better through their entire range given the class your driving. The last Mercedes I drove was a CL 63 AMG, great car but the steering was way too soft for the power. The last Audi I drove was an S5 it was nice just not tight enough.

Edison

December 29, 2009 2:10 pm

Totally agree. It seems that they are taking steps in that direction with the MQB platform, but for now BMW has them beat on dynamics. However, I think that for their smaller offerings, Audi makes a better looking car with better interior design, quality, and ergonomics. On a side note, I also think that Audi is a well-run company because they are keeping buyers interested with decent new products. This, I think, was the problem with Volvo and SAAB.

Edited by user on December 29, 2009 at 2:16 pm

sub39h

December 29, 2009 4:52 pm

i don't agree with that statement at all. in Europe, the A4 sells more than the Merc C-Class, and it's growth in market share is higher than that of the BMW 3-Series, and it's been that way since before MQB was introduced.

some drivers don't want to drive the rails off their car. Audis are cool, and BMWs are losing their coolness and that's the reason ppl are starting to abandon the blue and white propeller and going for the 4 rings.

car-o-bar

December 29, 2009 12:04 pm

I also think that Audi needs to differentiate their models a bit more that just size. A4, A6, and new A8 all look the same like a clothing line selling in S, M, and L sizes. Cars need to be different.

Hero Sina

December 29, 2009 12:09 pm

Audi is going too fast , they should slow down a little. the history tells us that this kind of speed has really harmful effects,we will see the result.

catchmyshadow

December 29, 2009 12:33 pm

Audi FTW!

okhtay

December 29, 2009 1:10 pm

it will never happen, Audi is too little to compete BMW. money is not all of things, prestige is more important.

Batista

December 29, 2009 1:18 pm

And Audi don`t have a prestige ?

tootall

December 29, 2009 2:41 pm

A totl of 42 models by the end of the decade.... Hmmm. I'm not sure what to think about that many models under that single brand. Like Hero Sina said, they should slow down a bit and concentrate on bettering the current products they do have.

jrcsh6

December 29, 2009 2:43 pm

audi is doing so well...

Edited by user on December 29, 2009 at 2:59 pm

theone77

December 29, 2009 3:11 pm

agree with audi going too fast, but they do have VW BIG brother backing them.

BlackSeries

December 29, 2009 5:17 pm

The danger for Audi will be whether they can improve their terrible resale values as they pump more models onto the market. I also agree with the above comments regarding the way they drive - the only Audi I have ever really liked to drive is the RS4, although I'm sure the R8 is brilliant. Their other cars have awful ride quality, understeer badly, and have next to no steering feel. I drove an S5 a couple of months ago, and was really disappointed. I had driven an M3 the week earlier and there was just no comparison - even a 335i is a better drive than an S5.

BavarianMS

December 29, 2009 5:35 pm

I agree with most comments. They do need to slow down. The slower they do it, the more successfully their product should deliver.

Triple_X

December 29, 2009 7:55 pm

I really agree with you guys. That's funny. As I work in the auto industry, often people ask me: what's the best, Audi or BMW? And I always give the same answer: do a testdrive with both! Somehow they always buy the beemer, even if they were going previously for the four rings...

Ferrariguy

January 4, 2010 6:28 am

If you work in the auto industry you would know that BMW owners will ALWAYS refer to their cars as "bimmers," and thier motorcycles as "beemer." ; )

ifudge

December 29, 2009 9:18 pm

A bigger product line doesn't equate to bigger sales but it does equate to bigger production and development costs. They took too long to put out an SUV and two door coupe. Both crucial in a modern passenger car product line. But now if their strategy is to plug in every little hole and segment and make 'sportback' models of everything then i think they should rethink it.

hunkeers87

December 30, 2009 9:15 am

car-o-bar you are so out of your mind, the same i can say for bmw and merc, please change your cars and dont mace them the same!!!!! all companys doing they cars similar, just diferent size.... Audi will take all soon, ramember my words, it's just start.... Sorry Audi haters, but that's gona happning soon and sooner then you think..... Look at bmw and merc, they alrady strugguling, starting fired they workers :D just look at this situation, next 5years will be fun for some companys..... Great job Audi, i now this day coming, since 1994 :) you are the best... And look at Audi Sport, awsome, GT3 winers, DTM winers, LeMans won 9 times in row no one dose that, and even WTCC Seat TDI won this year, you can belive it Seat won Bmw :D Funny just think one more time when you chose your next car..... :)

hossam004

December 30, 2009 10:38 am

hunkeers87...you mean that MB S ,C,E,SL,CL, SLK..etc. look like each other..i think you should see doctor for your eyes...& why didn't you mention the F1!!!!i didn't see any audi...i like audi's cars really but i'm try to be subjective..i'm a fan of MB..but BMW is the most dynamic here & benz is more safety & luxurious & audi between both with less price tag..it's VW stratigy

Ferrariguy

January 4, 2010 6:26 am

Yep, BMW and MB got both of the spectrums set, as much as I respect Audi's, I just can't see myself owning one, and yes, I have driven the new A4,S6,RS4, and the new S4 as well. Too heavy, and I prefer BMW's steering and chassis connection more. But the S4 is impressive though and I loved the 7 speed S-tronic, just that there was something missing and I'm not a fan of AWD.

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