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Audi says development process and expansions costs to dent profit

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Audi Headquarters

Audi has faced a massive decrease in profits by 6.2 per cent to 5.03 billion Euros last year

Audi is performing outstandingly well in the 2014 and they have managed to win the everlasting NO.1 contest in the luxury segment for the first two months of 2014. But now they are expecting a decrease in the profits due to the massive expansion costs and model modifications at the same time; they are also leveraging the costs to secure the foreign expansions. Audi is also working on different new models and new technologies which are expected to be introduced very soon, ultimately these things will also take a toll. Chief Executive Rupert Stadler said at a press conference, “We sow today what we reap tomorrow.” and “We are making enormous expenditure for future growth with our modular strategy.”

As the Audi is owned by Volkswagen Group and expanding in several foreign countries – installing new plants in Mexico and Brazil – and for the first time in 2014, it’s all set to manufacture more cars globally than at their manufacturing setup in Germany.

Audi is exerting enormous efforts to enlarge its deliveries from the targeted 1.5 million cars – as it had already been accomplished in 2013, two years in advance as of programme – to minimum of two million cars by 2020, going beyond in the process, another German auto maker and competitor BMW to crest the global luxury sales competition. Audi has faced a massive decrease in profits by 6.2 per cent to 5.03 billion Euros last year and Audi concerns that its operating margins might also plunge from 10.1 % in 2013 and further dent to between 8 to 10 per cent this year.

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