By on March 14, 2019

Audi’s global sales fell 3.5 percent in 2018, placing the Volkswagen Group brand further behind in its bid to challenge the likes of Mercedes-Benz and BMW. As its revenue dipped, so too did the brand’s operating margin.

Mistakes were made, the automaker claims.

As it gears up to present a strategic realignment plan on May 23rd, Audi’s echoing Ford in claiming 2019 will be a “transition” year.

Audi’s biggest mistake was not planning for the European Union’s new WLTP testing cycle, which led to a severe drop-off in deliveries in 2018. European sales sank 14 percent. The brand’s return on sales fell to 6 percent, down from 7.8 percent the year before.

“We cannot be satisfied with our performance. Audi has excellent products on the market, but in business terms, we failed the WLTP changeover as the ultimate stress test,” says Board of Management Chairman Bram Schot in a statement.

Investment in electric vehicle development and lingering costs from the diesel scandal further hurt the brand’s financial standing. The solution? In addition to the streamlining and targeted investments seen in the brand’s Transformation Plan, more high-end vehicles appears to be the key.

Audi puts the pedal down on its future proofing efforts on May 23rd with the release of its realignment strategy.

“We are significantly accelerating the change, because we have to master a double transformation,” sid Schot. “We will be much more customer-oriented and less self-centered; we will focus on what is decisive and implement what is decided upon in a very consistent and disciplined manner.”

In the coming years, Audi promises further “bundling of platforms and vehicle architectures,” increased speed and efficiency across all divisions, and a boost in high-margin vehicle production. Like its rivals, Audi knows EVs don’t pay for themselves. A smattering of new, pricey SUVs and crossovers can help generate the cash needed for R&D.

“By 2025, the product range in the upper mid-range and full-size segment will have grown to 15 models,” the automaker stated.

Want to help save the world? Buy a Q8.

[Image: Audi AG]

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13 Comments on “Hey, Wait Up: Audi Crafts Realignment Plan After German Rivals Spring Ahead...”


  • avatar
    sportyaccordy

    So much wrong here. What is the inherent value of “challenging BMW & Mercedes” if they potentially have to sacrifice profitability to do it? Why the aggressive push into EVs of questionable demand, when regular, non-plug in semi-parallel hybrids are profitable, easy for customers to use, and effective at reducing emissions?

    I feel like these corporations are more concerned about signaling than doing what makes business sense. Shareholders don’t give a crap about bold proclamations- they want growth and profitability. Customers don’t give a crap about bold proclamations either- they want good cars with positive ownership experiences and good value propositions. Like with everything VWAG is making something simple very complicated.

    • 0 avatar

      Every time I read another story about the importance of “mobility” or “electrification” I find myself asking the same question. Do folks come in my showroom and ask about some of these questions? Yes. Do they go by a Tesla because we don’t currently have it? Nope. It seems everyone in the auto industry has FOMO, but I think they’d be better served just doing what makes sense and then paying up to someone else who makes the technology. I think much ado is made about social media marketing, but getting “likes” doesn’t directly translate into selling cars, regardless of what your marketing professor said.

      • 0 avatar
        fazalmajid

        There is the seen and the unseen. Many customers have given up on the German car makers because of their arrogance and complacency regarding EVs, and go straight to Tesla (or even Volvo or Jaguar) without even setting foot in a Mercedes, BMW or Audi dealership, just like it doesn’t even occur to most luxury car buyers to visit a Cadillac dealership. That’s how irrelevance happens. Tesla sells twice as many models S as Mercedes/BMW/Audi sell in the same class, and they will fix the Series 3 teething problems eventually.

  • avatar
    redapple

    Sporty…:

    Wise words. Agreed.

  • avatar
    stingray65

    “In the coming years, Audi promises further “bundling of platforms and vehicle architectures,” increased speed and efficiency across all divisions, and a boost in high-margin vehicle production.”

    Should I interpret this to mean that Audi is going to share even more stuff with Skoda and VW and then charge higher prices for it? I think GM tried this in the 1970s and it didn’t work out very well.

    • 0 avatar
      FreedMike

      I’d say there’s a big difference between platform-sharing and badge engineering. The latter is what GM did.

    • 0 avatar
      bufguy

      They already do share platforms and vehicle architectures and they have for years. The MQB platform isused for the Golf, Jetta, and A3, Q3 and TT…The corporate 2.o liter engine is used in the GTI, Tiguan, Atlas, A4, A3, TT, Q5, A6, albet with slightly different tuning. The Q7 shares its platform with the Toureg…..GM has shared platforms for 70 years…The C body used by Buick, Olds and Cadillac…The B body used by Buick, Chevrolet , Pontiac and Olds…Seems to be working out pretty well foe VW/ Audi

  • avatar
    fazalmajid

    Also Jaguar sharing a lot of components with Ford before the Tata acquisition. While not as egregious as GM, it still dings the brand’s image.

    I’m a former Audi owner (my wife’s Q5, and I was planning on getting a S4 until the dealership tried a bait-and-switch and I got a BMW in disgust). I wouldn’t consider an Audi today because of Dieselgate. Someone’s got to pay for all those legal fees, and I’d rather pay for engineering and the actual components in my car, thank you very much, e.g. not paying German-manufactured prices for made-in-Mexico cars. Secondly, the scandal showed the depth and pervasiveness of ethical rot in all VW companies, including Audi and Porsche, and I would find it hard to trust them. I think it will take at least 10-20 years for the brand to recover.

    I am also sick of the 3 German manufacturers’ arrogance and complacency about EVs. So far all their announcements are vaporware.

    My next car will probably be a Jaguar i-Pace.

    • 0 avatar
      White Shadow

      I got my current Audi (it was made in Germany, BTW) just a few months before the emissions scandal. But it wouldn’t have stopped me even if the timing was reversed. Pricing hasn’t changed because the market wouldn’t bear it. So no real worries with buying an Audi and paying for the scandal. And BTW, get ready to move away from BMW if you are worried about buying a German car that was made in Mexico. Even some of the next generation M cars will be made in Mexico.

    • 0 avatar
      dumblikeyouTu

      Ding to what quality? Jaguars were infamously shitty before Ford bought them. Ford only made Jaguars less shitty, but they were still basically crap. Even Tata can’t erase, or change this fact as Land Rover/Jaguar are usually at the bottom of the list for reliability.

  • avatar
    loopy55

    As usual all the haters line up… Let’s be clear Audi screwed up royally with WLTP – they just could not deliver the excellent cars they built. That’s the only reason they dropped in deliveries.
    And WLTP is the reason the Q3 is not for sale yet in the USA.
    VW/Audi and the other germans will crush Tesla. They will come to market with vehicles that are demonstrably better than the ‘built in the back of a shed’ Teslas and at a price where they can make money ( which Tesla has been unable to do.)

  • avatar

    “Audi’s echoing Ford in claiming 2019 will be a “transition” year.”

    Yeah, but they do not have such a genius as Hackett.

  • avatar
    Fred

    What I read is that the bottom line is more SUVs. Seems to be the answer for every car maker these days.

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