VW's Audi to Boost Investment, Double Model Lineup
By Chad Thomas and Jeremy van Loon
Dec. 11 (Bloomberg) -- Audi AG, Volkswagen AG's luxury brand, plans to increase investment over the next five years by 1 billion euros ($1.32 billion) as the carmaker nearly doubles its model line.
Audi will spend 11.8 billion euros through 2011, the Ingolstadt, Germany-based company said in an e-mailed statement today. Audi's investment plan through 2010, announced last December, was for 10.8 billion euros.
Chief Executive Officer Martin Winterkorn, who will take over as head of Wolfsburg, Germany-based Volkswagen in January, plans to add 18 cars and sport-utility vehicles
through 2015, bringing the total lineup to 40 models. Winterkorn wants to challenge market leaders DaimlerChrysler AG's Mercedes-Benz and Bayerische Motoren Werke AG, setting a goal of selling 1 million vehicles in 2008.
``We can only secure our company's success with attractive products,'' Rupert Stadler, Audi's chief financial officer and the division's designated CEO, said in the statement. ``This is also an investment in the future of the company.''
Profit at Audi has helped offset losses at other Volkswagen divisions. Audi's 2005 net income accounted for more than two- thirds of group profit of 1.12 billion euros. The company sells more than three-quarters of its vehicles in Europe and aims to expand sales in the U.S. as well as boost sales in other regions.
Audi will spend 8.4 billion euros of the money developing new models, the carmaker said today. Overall investment will increase by about 2 billion euros annually.
Vehicle sales in November increased 8.1 percent, led by higher demand in the U.S. and China. Audi delivered a record 75,250 cars
and sport-utility vehicles last month and sold 833,000 vehicles in the first 11 months of 2006.
Audi said it will roll out a new A5 coupe, the TT roadster and the R8 sports car
to widen product offerings next year.