In the face of a challenging financial year in 2017, Audi Group increased its revenue and earnings with revenue surpassing €60 billion for the first time.

Audi again set a new global sales record in 2017 despite difficult trading conditions, finishing the year 0.6% ahead of 2016 with 1,878,105 vehicles delivered.

Despite the unfavourable trading conditions and currency environment, the Audi Group’s revenue increased by 1.4% to €60.128 billion  in 2017.

The German automaker has more than doubled its revenue over the past 8 years, and with an operating profit before special items increasing to €5.1 billion (an increase of 4.4% on 2016), the corresponding operating return on sales of 8.4% is within the target corridor of 8% to 10%.

On the back of a robust performance increasing its revenue and earnings in 2017, Audi Group will launch more new models than ever before in 2018 as it enters the age of electric mobility.

This will include an unprecedented year in 2018, with record model initiative of more than 20 market launches and the first electric series-produced model: the Audi e-tron.

In view of the ambitious management of multiple model launches and phase-outs, Audi anticipates another challenging year, before the model initiative should have a sustained positive impact on deliveries and earnings from 2019 onwards.

 

Investing in the future

This expected positive impact is part of Audi’s massive investment in the future driven by its Action and Transformation Plan, which aims to achieve positive earnings effects totalling €10 billion by 2022, and to accelerate the organisational realignment for future business models.

This investment in the future is part of a master plan which according to Chairman of the Board of Management of AUDI AG, Rupert Stadler, will make Audi a leading force in the near future as the auto industry faces upheaval.

“In 2017, we demonstrated entrepreneurial strength and above all formulated a determined master plan for the coming years,” he said.

“We intend to play a leading role in the tremendous upheaval facing our industry,

“By 2022 alone, we have planned more than €40 billion for development activities and investment,

“We are making Audi fit for this mission with our Action and Transformation Plan.”

Audi’s Action and Transformation Plan also aims to improve process efficiency in technical development by up to 30%, partially as a result of intensified virtual development.

Due to the intensive transformation phase implemented by its Action and Transformation Plan, Audi has increased its budget for further training by a third to a total of more than €0.5 billion by 2025.

 

The push into China

Audi’s market push into China is also part of the company’s investment in the future.

In conjunction with its venture partner FAW, Audi will significantly expand its model range, particularly with regard to electric drive and sporty SUV’s.

Ten SUV versions without  predecessors are planned for the coming five years, seven of which will be produced locally, meaning that the Audi portfolio produced locally at FAW-VW will be more than doubled by 2022.

With the joint establishment of a new sales company and a joint venture for mobility and digital services, Audi and the FAW Group are restructuring their business in China for the next growth phase.

In addition, Audi is in constructive talks with SAIC about future cooperation in order to further strengthen its involvement in the Chinese market.

 

Big year ahead

With more than 20 market launches this year, Audi will manage the biggest model initiative in its history.

Audi will present new automobiles in six of its core model series and successively start their production.

Audi’s first fully electric series-produced model, the Audi e-tron, will be launched late this year, an SUV which allows fast-charging at up to 150 kilowatts, making it ready for long-distance use again in less than half an hour.

In the current financial year, Audi plans to achieve the 2017 record level of car deliveries, although the numerous model changes will at first have a dampening effect.

Audi expects revenue to increase slightly with a net cash flow between €2.7 billion and €3.2 billion.

Implementing its Action and Transformation Plan, the automaker is aiming at an operating return on sales within the target corridor of 8% to 10%, despite high ramp-up costs and upfront expenditures for the future.

 

Electric roadmap

Audi has significantly broadened their electrification roadmap across the entire model portfolio.

To prepare for the electric mobility of tomorrow, Audi is collaborating closely with Porsche and Volkswagen, resulting in vehicle architectures which are uncompromisingly tailored for electric driving and allow major synergies within the VW Group.

In 2025, Audi will offer more than 20 electrified models that will account for one third of unit sales.