Audi (and Porsche) are more important than ever for Volkswagen

Posted by Kelvin Brookes in Motoring News | Comments Off on Audi (and Porsche) are more important than ever for Volkswagen

As a premium brand, Audi positions itself away from the mainstream and apart from its parent, the Volkswagen Group. That has never been more important than it is today. The emissions scandal that has engulfed Volkswagen hit UK registrations in November, down 20% while Audi sales fell just 4%.

This, despite its best-selling models, the A3 and A4, using the same diesel engines – complete with software to cheat emissions tests – that have tarnished the good name of VW and brought the group’s plans for world domination to an abrupt halt. It is hard to imagine that car savvy customers don’t know Audi’s connection with VW, so we have to assume that it stands aloof because of its premium status and the reassuringly high prices of its cars.

At a time when Matthias Müller, the Volkswagen Group’s new ex-Porsche chief executive, has called for deep cost savings to build up a cash pile for the inevitable fines, compensations and legal actions in the US and the wider recalls and rectification, Audi has been busy launching new cars. The new model A4 and the R8 supercar, went on sale in October and early November. Of course, it would be counter-productive to curtail projects that have long been completed and paid-for but the truth is that now, more than ever, the Volkswagen Group needs the big profits that Audi (and Porsche) generate.

In recent times, Audi has accounted for more than 40% of the group’s total profit. In 2014 it sold 1.74 million cars and made 5.2 billion euros (£3.7bn). It has doubled its sales in the UK in 10 years (159,000 in 2014) and at the end of the first 10 months of this year was 8,000 units ahead of BMW (without Mini) and had sold 20,000 more than Mercedes.

Audi is the leading premium brand in China, the world’s largest car market. It has been doing well in America too – earlier this year, Luca de Meo, then sales director, transferred to run Seat in the management fall-out following “Dieselgate”, said, “Audi is growing at almost three times the rate of the market” – but had a rude shock in September when Mercedes moved ahead of Audi thanks to the new C-class – just as the new A4 came out.

The bosses, some now departed or suspended, admit that the real secret of Audi’s success is a constant stream of new models, opening up new market niches. In 2001 Audi offered 17 models. Now it has 50 and by 2018,      unless it is constrained, the total will reach 60. In this, Audi sets the pace that BMW and Mercedes are forced to follow.

Audi’s manufacturing facilities are working at full capacity – Q3s are already made in Seat’s Martorell factory in Spain – and a new plant in Mexico will produce the Q5 for all markets, including the UK. The new Q5 is due in the last quarter of 2016.

In the next two years, in addition to replacements for existing models and variations on recently launched new products, Audi will exploit ‘intersegment clusters’ – with the Q2, one size down from the Q3 SUV, and an expansion of the TT sports range, either as an SUV crossover or a four-door saloon, or both.

The upcoming Q6 will be a pure electric SUV, a direct rival for the Tesla Model X and there is also an electric R8 E-tron in preparation with a 280 mile range between battery charges.

As the development centre for the MLB ‘toolkit’ that is used for longitudinal-engined cars throughout the Group, Audi will also be in the forefront of VW’s attempt to deflect the emissions scandal by introducing plug-in electric vehicles and hybrids to all its brands.

The source article can be found at http://www.motortrader.com/blogs/audi-keeps-distance-08-12-2015