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Audi looks like "a brand in crisis" says global chief

Audi says its e-tron will help lead the brand's revival
Andrew Chesterton
Contributing journalist

14 Mar 2019 • 4 min read

Audi’s global chief has delivered a sobering summary of the brand’s 2018 results, telling media and analysts that the numbers show a “brand in crisis”.

A combination of diesel-gate fines, the costs of recalls and potential payouts to international customers, as well as the brand’s admission that it “failed” at adapting its range for the World harmonised Light vehicle Testing Procedures (WLTP) standards, saw all key numbers dip into the red in 2018.

On diesel-gate, Audi offered an apology of sorts, saying it never should have happened, and never would again.

"We are all agreed here at Audi that nothing like the diesel crisis should ever have been allowed to happen," Audi’s CEO and Chairman of the Board, Bram Schot, said.

"And nothing like it will ever happen here in the future: never again."

As a result, global sales dropped by 3.5 percent, or 65,000 fewer cars, to just over 1.81m vehicles in 2018 compared to the previous year. Operating profits shrank by 25 per cent to 3.5b euros.

And the numbers are just as sobering in Australia, where sales dropped by 11.8 per cent to 19,416 units sold in 2018, compared to 22,011 in the previous 12 months.

Pointing to one of the brand’s most iconic commercials (when, in 1986, an Audi 100 climbed the Kaipola ski jump in Finland - a feat the brand repeated in 2005 in an Audi A6), Mr Schot said the company needed to find that “strength” again.

“Audi must find its way back to that strength. And we will. I do not mean that nostalgically, I mean the style, the attitude,” he said.

“Because if you hear the name Audi today, some of you might have a completely different image in their mind. You might be thinking of a company in crisis. And at first glance, last year’s figures prove you right.”

In laying out the path to success, Mr Schot said a new-vehicle onslaught (with 20 global market launches in 2019, and 30 electric models by 2025), as well as reduced complexity in its enging/transmission line-up, would ensure they were better prepared for 2019.

“This year will be a year of transition, a year in which we tackle things, make changes and improve them. WLTP Second Act will once again be a feat of strength for us. But this time, we are prepared. We have reduced the number of engine-transmission variants by 30 percent.

“In addition, we have increased our test-bench capacity by 30 percent and added 300 more employees for homologation. Nonetheless, it is clear that despite these measures, WLTP will be a challenge for us. The same applies to the market environment in 2019.

“Another factor is that in 2019, we will start the second phase of our product initiative. Once again, we have more than 20 market launches ahead of us.

"In addition to focusing on electrification, we will continue to strengthen our upper-class and will launch numerous high-performance models on the market. These are many newcomers all at once – and that will also require great efforts.”

But despite the positive outlook, the brand is still warning of soft results in 2019.

"In 2019, we will apply all our strength to overcome that low point and get back on track. It will be a year of work, of creating order, and there will probably not be a great reward awaiting us at the end of the year. Not yet. That will come later,” says Audi's finance chief, Alexander Seitz.

In Australia, the brands local team points to production delays sparked by the global WLTP problems as a cause for its sales slowdown, which has forced it to push back the launch of the A1 and the e-tron, but says its optimistic about the year ahead.

"We're refocusing our efforts, and focusing on our most important person; our customer," says Audi's local spokesperson, Shaun Cleary.

"We'll see the A1 launch in the last quarter of the year, and then the all-new Audi e-tron in early 2020. In the meantime, we're very excited to launch the all-new A6 in mid-2019, and as part of that we'll be bringing the second version off our Audi connect, which we're very excited to tell you more about."

What will it take for Audi to regain its strength? Let us know in the comments.

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