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A 12 billion Euro raft of investment in new models over the next six years will float the carmaker’s plans to conquer the global prestige car market.
"We currently have 32 models on a world-wide basis and by 2015 we will have 40," Audi AG board of management member Peter Schwarzenbauer says. "We are investing, per year, two billion Euros into new product development until 2015." "Most importantly, this money is coming out of our own cash flow so we do not have to ask any third party for it. We are the only car manufacturer I know of at the moment that can say this."
While not confirming any of the upcoming models, Schwarzenbauer says there are some obvious gaps in the Audi range that could support another model. "We have announced we are going to bring an A1 ... if you look between the A1 and the A3 there is still a hole, between the A6 and the A8 there is room to position something, so there are still some areas where we see potential," he says. "And these are new models, not refreshes or derivatives ... totally new models."
It is this bullish approach to model development that Schwarzenbauer believes will set Audi up as a front-runner as the world comes out of the global economic crisis. "I think we will be the big winners of this crisis," Schwarzenbauer says. "The main reason I say this is because we decided, despite what is going on around us, to continue the investment plan into new products "This is why I believe the diversification into more niches and more models will make us even stronger because our product portfolio will be so much more attractive than some of our competitors."
Audi Australia boss Joerg Hofmann has already set a target for local sales of 15,000 by 2015 but concedes that by then that may not be enough to topple BMW and Mercedes from the volume leadership. "It may not be enough ... but I believe there is a ceiling for sales for a prestige car company in Australia and that is 18,000 a year," Hofmann says. "Above that margins will be cut too far, discounts will be too large and the brand image will be at risk ... that is not something we will do."
Schwarzenbauer is fully supportive of the balanced approach to sales. "Volume is only one of the targets, we also want to be a successful car company. We want to grow, we need to grow but we are only going to do it if it makes business sense ... and not just for the sake of volume."
Audi's plans pivot around the new models, many of which are expected to be moderate volume niche offerings into segments of the market where the company sees an opportunity. "You have to look at what the consumer is telling you and they are saying that they do not want to drive around in the same cars as everyone else, they want a choice to be different," Schwarzenbauer says. "Our product department does not like it so much because it adds great complexity (to the model range) but building niche on niche is working for us."
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