Hey, Wait Up: Audi Crafts Realignment Plan After German Rivals Spring Ahead

Hey, Wait Up: Audi Crafts Realignment Plan After German Rivals Spring Ahead

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.

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[Image: Audi AG]

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