Audi News
Speech: Rupert Stadler, Chairman of the Board of Management of AUDI AG (Part 2)
By source: Audi AG
May 8, 2008, 21:54

Ladies and Gentlemen,

As Mr. Strotbek has shown, Audi is in a very good position to tackle the challenges of the future. And we will continue to pursue our course of qualitative and profitable growth. At the same time, we realize that the automotive industry faces challenges from external sources and that these challenges have become much stiffer this year. And there are no signs right now of this situation letting up.

These challenges include above all the sharp rises in the cost of raw materials. This is true in equal measure for raw steel, precious metals and aluminum. And the oil price has doubled from 57 to around 114 dollars over the course of the past year alone.

Another risk factor is the development in important trading currencies. This year, the euro has already exceeded the level of 1.60 dollars – whereas back in 2002 one euro cost only 86 US cents. The pound sterling has already fallen in value by 13 percent in the past 12 months.

Finally, the auto industry is having to deal intensively with the issue of climate protection. The powers that be at the EU are debating a CO2-based approach for the car industry.

The issue at stake is how the average limit value of 130 grams of CO2 per kilometer is to be best achieved.

The important thing for us is that the premium manufacturers, in other words the strong brands from the German car industry, should not have to bear the entire onus on their own.

For instance by being punished by high penalties for manufacturers of larger vehicles.

Not only would this be a questionable industrial policy, it would also be ecologically counterproductive.

After all, brands like Audi are the technological pioneers and innovators of our industry.

However, while at EU level efforts are being made to ensure a fair burden, some European countries have introduced CO2 taxes as they see fit. In some instances this is done so as to ensure that their own industry suffers as little as possible. In Germany this is taking somewhat longer, with no solution yet in immediate sight. But I hope that our decision-makers are aware that our vehicles are on average over eight years old and that customers are currently showing no interest in buying because they are unsettled.

As has been stated, we must cap CO2 emissions. We are aware of our responsibility for protecting the climate. But I hope that commonsense, moderation and pragmatism prevail.

For example I would like to see the specific product development and life cycles of the automotive industry taken into account.
The automotive industry provides well over one million jobs in Germany alone. We cannot afford to put those jobs in jeopardy by following a short-sighted approach.


The German automotive industry has done its homework on climate protection, and Audi has been more studious than most.
And we do not need a new brand claim in this respect, as “Vorsprung durch Technik” is not a marketing slogan, but a deeply ingrained commitment.

For instance, an Audi today uses 36 percent less fuel than it did in 1990 to develop 1 kilowatt of power and therefore 1.36 horsepower.

We will be vigorously pursuing further improvements. We look at our entire vehicle fleet when seeking to boost the efficiency of each individual model. We will implement further internal engine modifications which will help to reduce fuel consumption in various model lines by as much as 18 percent in 2008. Overall, this will bring our fleet emissions down by an average of 10 grams of CO2 this year. We aim to cut fuel consumption by at least 20 percent by 2012.

And how do we intend to go about this?

Quite simply: with typical Audi core competences

Lightweight design, for instance aluminum/steel hybrid construction for the Audi TT. Investments in new generation of engines, with TDI and TFSI, with turbocharging and Audi valvelift system (AVS) Aerodynamics and design DL transmission technology, based on the modular longitudinal platform Hybrid technology with the goal of driving using electric power.


We will, of course, continue to emphasize diesel technology in the future.

Our TDI will become the cleanest diesel engine in the world this year, thanks to its ultra low emission system.

This reduces nitrogen oxide emissions by up to 90 percent. The vehicles outfitted with this engine will meet the current standard in the U.S. and the toughest emission limits yet that are in the pipeline in Europe.

Our new products furthermore demonstrate again and again that efficiency and sportiness are not mutually exclusive.

Ladies and Gentlemen,

The challenges facing us are wide-ranging, but Audi is outstandingly well placed. The latest key figures reflect that. The year-on-year comparison shows that sales of Audi vehicles have reached a new record level and again generated excellent profits.


The Audi brand chalked up sales of 251,268 vehicles. This is a rise of 1.3 percent.

This is despite the fact that we launched our strongest model, the new A4 Avant, on the German market just two weeks ago.


For the period January to April, unit sales increased year on year by 1.7 percent.


Lamborghini saw its unit sales climb by more than 20 percent to 639 vehicles.


Since January 1, 2008 the employee total for the Audi Group has been 56,496 and is therefore 6.8 percent higher than at the same point in the previous year. This increase is mainly due to the fact that the Brussels plant and its 2,200 workers are now included in the consolidated figures.


Revenue for the first quarter was only marginally below the previous year’s outstanding level, at almost EUR 8.3 billion, despite the adverse effect of exchange rate movements.

Meanwhile the Audi Group increased its operating profit by an impressive 28.2 percent to EUR 514 million, mainly thanks to the improved model and equipment mix and the ongoing optimization of product costs. Mr. Strotbek mentioned this already.


Ladies and Gentlemen,

The figures presented here show that we are maintaining our profitable course of growth. We manufacture our cars to suit our customers, tailoring them like made-to-measure outfits. To continue this analogy, we will be producing one million made-to-measure cars in 2008.

And a considerable number of these will be the new A4 Sedan and the new A4 Avant.

International press representatives were able to test-drive our new A4 Avant on Ibiza last month. Over 550 journalists from almost 30 countries tested out this gem of a new car – and were deeply impressed. The new Avant’s unique design came in for particular praise. But its dynamic handling was also very well received, as is evident from various articles and TV and radio features.


And our portfolio of highly appealing products will continue to grow. We plan to expand our model range substantially to 40 vehicles by 2015. We are investing some two billion euros in our products each year. And we have plenty of interesting surprises in store for you!

We unveiled one of them at the Beijing Motor Show in mid-April: the Audi Q5. This emotion-packed product increases our presence in the SUV segment, in which we have been operating very successfully for the past three years with the Audi Q7.

This performance SUV has been greatly awaited all over the world, and I am convinced that we have yet again delivered precisely the product that our customers want.

The media and customers have also given an enthusiastic response to the Audi A3 Cabriolet, which arrived at many German dealers last week for test drives. The order books are brimming, and this convertible will give further impetus to our successful A3 model family. Incidentally, the sales figures for the A3 Sportback and the three-door A3 for the period January through March were up yet again by 2.5 percent, to 62,021 units.

Our current product improvement of the Audi A3 will give further momentum to this trend. The design is now even more striking and sporty. Among other things the fenders, the single-frame grill and the exterior mirrors have been modified. And the daytime running lights are now standard on the A3. Another new development is that an S3 version of the A3 Sportback is now available, as illustrated here.

We have been rolling out the RS 6 Avant in markets since April – the most powerful production model that Audi has ever built.

The journalists are currently busy testing the new Audi TTS and Audi TT TDI at a dynamic driving presentation in Munich. The spotlight is of course on the first production sports car to feature a diesel engine. This 170 hp TDI engine consumes an outstanding 5.3 liters of fuel per 100 kilometers and has CO2 emissions of just 139 grams per kilometer.

And anyone who attempts to find something comparable on offer from the competition will be searching in vain!

But Audi wouldn’t be living up to its own standards if we didn’t go one better.

In test drives across the U.S., the R8 V12 TDI concept has really caused ripples in recent weeks. Audi has opened up a new chapter of diesel technology in unveiling the first twelve-cylinder diesel engine in a high-performance roadgoing sports car.
The V12 TDI is a close relative of the engine in the two-times Le Mans winning Audi R10.


It has long since become routine for Audi to leave awards ceremonies clutching an armful of trophies. For instance the Audi R8 won a double victory at the “World Car of the Year Awards” that coincided with the New York Auto Show.

And the A4 earned the title of “Germany’s Most Popular Car” in a reader poll conducted by over 100 regional weekly newspapers.


Audi again fared outstandingly in the recently published ADAC breakdown statistics for 2007. The Audi A6 and Audi A4 again ranked first in their classes. The A6 left all its competitors trailing for the sixth year in a row.

Awards and studies such as these confirm to us that Audi is steadily gaining in prestige. We are attracting more customers from other premium brands than we lose to them – and we have the youngest customers in the premium segment.

All that gives us considerable cause for satisfaction.

But we will of course not be resting on our laurels. We will continue working on the quality and image of our vehicles.

We are constantly investing in innovative technology in order to carve out an even greater competitive advantage.


For instance with our new seven-speed S tronic dual-clutch transmission, wholly developed by the brand. It means the gears can be changed very fast, without interrupting the power flow. The low level of friction boosts efficiency and thus cuts consumption by around 0.3 liters per 100 kilometers. Audi will be introducing the new S tronic into multiple model lines as standard during the course of this year.


We will shortly be bringing our new third-generation Multi Media Interface MMI onto the market. It will offer a wide range of attractive new features, such as a three-dimensional navigation view of buildings and routes.

We are actively promoting research into car-to-car communication and intelligent traffic guidance systems. This is an area in which we can contribute a great deal towards safety, traffic flow and climate protection.

We also aim to enhance vehicle safety through another innovation that we are currently working on. Driver monitoring, based on detection of eyelid closure, warns the driver as soon as they become tired or even experience micro sleep.


We have become the first car manufacturer in Europe to adopt a new presentation technology – of digital cinematic quality – in Technical Development. It is possible to analyze our future vehicle models realistically and in detail in the design check and the Data Monitoring Centre at our Virtual Reality (VR) Studios even before they have been created. Virtual tracking shots around the exterior and through the interior of the car allow engineers to accurately assess the vehicle geometries developed on the computer. The various materials – from the luster of the paintwork to the fine leather details – look real and true to life.


In opening our new climatic wind tunnel, we have once again redefined the benchmark in order to assure top quality for our products.

The tunnel allows us to test cars under realistic, natural conditions in icy cold or blazing heat and with wind speeds of up to 300 kilometers per hour.

This investment also helps us to continually improve the drag coefficient of our vehicles and thus to enhance their fuel consumption and eco-friendliness.

In March, we inaugurated the new engine testing center at Audi’s Neckarsulm plant following its successful trialing. We are also currently investing over EUR 17 million in a new toolmaking shop, again in Neckarsulm. The new facility above all allows a synchronized production system. Completion is scheduled for fall 2008.

Audi affirms the future of its German locations. This is evidenced by the founding of an association to promote the development of the Ingolstadt region in tandem with the city, the district authorities and other companies. Its aims include promoting innovation in research and development throughout the region, and enhancing its appeal for visitors and prospective residents and employees.

Ladies and Gentlemen,

Our many different capital investments lay the foundations for our continuing success. And we will exploit our growth potential to the full in existing and above all in new markets.


To do this, our sales strategy will include putting exclusive dealerships in large metropolitan areas around the globe. And our new Audi terminal concept is setting standards in architecture.

Expanding our dealer network in dynamic growth markets such as China and India is of strategic importance for us.


Here are a few examples of new locations in China, which we will be realizing in the course of this year. We will then have 132 exclusive dealers in this important market. A further 90 will be added by 2012.


And we are planning to open at least 10 new dealerships in India alone in 2008.

In the U.S., too, we are constantly working to further improve our dealer network. Let us begin, for example, with the implementation of our new showroom concept.

We would also like to be more successful in North America. To that end we are sounding out options for cooperating with Volkswagen on the construction of a new plant.

Given the current value of the dollar, we stand to benefit tremendously from having our own local production facilities. Until now, the growth that we have seen throughout the world has not translated into growth on the U.S. market to the extent that we would like.

But I would like to make one thing quite clear: Quality takes priority over quantity. Increasing volume at all costs cannot be the corporate goal.

Ladies and Gentlemen,

Allow me to summarize: In 2007 Audi again achieved record figures in terms of vehicles sold, revenue and profit.

We will continue our worldwide success in 2008.

We hope that additional attractive products will help us to grow further this year.

The goal is to sell more than one million “made-to-measure outfits.”

And countless innovations will help us expand our “Vorsprung durch Technik” when it comes to efficiency. Where you see four rings on the outside, Audi’s leading technology will be on the inside.

Despite the wide many different external challenges, we look to the future with confidence – Audi is, after all, a strong, successful, forward-looking brand.

Thank you for your attention.

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