Speech to the Annual Press Conference 2013 -
Rupert Stadler, Chairman of the Board of Management of AUDI AG
Source: Audi Media

Ladies and Gentlemen,

I also would like to welcome you to our Annual Press Conference. When you look back at the year 2012, which Audi headlines occur to you? Here are some of my personal favorites:

“Audi Q3 is the Germans’ favorite car,”
“Audi A3 wins the Golden Steering Wheel,”
“Triumph for Audi hybrid at Le Mans,”
“Audi to build a plant in Mexico”
and not to forget:

“Audi buys Ducati.”

We continued our success story in the year 2012 and opened a new chapter with some strategically important decisions. “We” – the Audi Group that is, are some of the world’s most fascinating and sporty brands – Audi, Lamborghini and Ducati – as well as Italdesign Giugiaro as a competence center for design and engineering. And the Audi Group includes numerous other subsidiaries as well.

Here, we are taking stock – and the bottom line says that we were extremely successful in 2012. That can be seen for example from the ongoing growth in our customer base. Every 22 seconds, we make a new Audi driver happy in one of our more than 100 markets worldwide.

Last year, we delivered more than 1.45 million automobiles of the Audi brand: about 152,000 more than in 2011. Today, we sell nearly twice as many cars as ten years ago. At the beginning of last year, economic indicators were by no means pointing towards growth everywhere, especially not in Europe, which is still our most important market: budget problems in many countries resulting in the need for public savings and reform programs, unemployment among young people, as well as uncertain consumers and entrepreneurs. All of this dampened economic growth and demand. In the euro zone, it actually contracted.

That is why I am particularly pleased with our results this year. Firstly: Audi grew in all regions of the year in 2012 – also in Europe. That means, secondly: We achieved new best figures in all of these regions. And thirdly: Compared with the overall market, we grew at an above-average rate.

Two regions are especially dynamic for us:

North America, with an increase of nearly 19 percent.
And Asia-Pacific, with a good 28 percent plus.

We grew in Europe as well, against the general market trend, in fact. We had to swim against the current and made good progress nonetheless. In absolute terms, our home continent is still our most important sales region. We delivered 739,000 automobiles in Europe – a good 30 percent more than ten years ago. In comparison: The total market in Europe has not actually grown in that time – but we have gained more than one third.

Ladies and Gentlemen,

you all know where the current problems lie: Spain has reached its lowest market volume since 1986. Demand in Italy is at the level of 1979. Figuratively speaking, that means that the automobile market has been thrown back by 33 years. It is true that Audi has a better-than-average performance there too, but this market development has not left us untouched either. We achieved our European growth elsewhere.

The United Kingdom for example: Audi achieved a new sales record of more than 123,000 units and an increase of seven percent compared with 2011. At one time, we were the number three in the premium segment there, and now we are battling neck-and-neck with BMW for first place.

Russia for example: 44 percent growth is the strongest of all our top-ten markets. We have doubled our sales volume to now about 33,500 units in just three years. And Russia will be a market with further potential also in the future.

Last example: Germany. Here too, we achieved a new sales record of 263,000 units. This number represents quite a decisive step: For the first time, we were the premium brand number one in the car business in our domestic market – on the home turf of the big three premium brands.

Let us look across the Atlantic: We are profiting to an above-average degree from the dynamism of the US market. A remarkable fact is that since January 2011, each single month –26 months in a row that is – was a record for Audi in the United States. It is also pleasing that not only the quantity of business is increasing, but also the quality. In 2010, roughly every fifth Audi sold in the United States was a model from the upper premium segment. Today, every third Audi sold there is an A6, A7, A8 or Q7.

Three facts on China: We once again significantly extended our lead over the competition in 2012. Audi gained more new Chinese customers than ever before within one year. And we were the first premium supplier to pass the magic mark of 400,000 deliveries in one year. In comparison: We achieved that number in 1995 worldwide; today in China alone. At the end of 2010, we delivered the one-millionth Audi in China. It took us more than 20 years to do that. We then announced that we would reach the second million within three more years. We will get there about the middle of this year.

Ladies and Gentlemen,

this brings us from the markets to the models, the drivers of this growth. The Q-model family has long since established itself as the second cornerstone of our unit sales. Every fourth Audi is already an SUV. More than 200,000 units sold last year make the Audi Q5 the global market leader in its segment once again. And it has held this position without any interruptions since 2009. For its little brother, the Q3, 2012 was the first full year on the market, and with a successful performance: nearly 80,000 units delivered in Europe alone. This year, we will launch the Q3 in additional markets and will start local production in China.

Our deliveries in the full-size segment also continued to increase at an above-average rate. The proportion of models in the prestigious C and D segments has continued to grow in recent years, although we have also achieved growth at the lower end of the model range. And since last year, our new S-models, S6, S7 and S8, have also been available. They give the model series even more emotion and sportiness. At the same time, we have made further substantial efficiency progress compared with those models’ predecessors: the Audi S8 with an unparalleled decrease in fuel consumption of about one quarter for example. We achieve these efficiency advantages with technologies like our cylinder on demand.

In addition to the S models, we expanded the full-size segment with the A8 hybrid version. This model follows the Audi Q5 hybrid quattro and the A6 hybrid, which have been available since 2011. Audi therefore has the biggest fleet of full hybrids among all its competitors.

Every single model that we launched in 2012 sets standards. I would like to emphasize one of them: the new Audi A3 – for us, without a doubt the most important new Audi model of the year 2012. This is demonstrated by the huge media interest alone. 1,200 journalists from 35 countries came to the first test drive – another record in Audi’s history.

Since the first generation, which was launched in the mid-1990s, the Audi A3 has been a driver of our growth: Around the middle of this year, we will hand over the three-millionth A3 to a customer. Our customers loved the new generation right from the start and the trade press was also convinced. That is one of the reasons why we won the Golden Steering Wheel in 2012. The current Audi A3 model is a demonstration of important technology of the future. Here are three examples:

Keyword lightweight construction: 80 kilograms weight saved with a compact car – that is remarkable.
Keyword connectivity: Via integrated Facebook you can find out where your friends are located and plan the route straight to them. And you can access current train or flight information. That is just a small selection of the many possibilities that the new A3 offers. Keyword efficiency: With its 1.6 liter TDI engine, the new A3 has CO2 emissions of just 99 grams per kilometer.

And last week, we presented two more models in Geneva: On the one hand, the A3 g-tron with bivalent gasoline/natural-gas drive and emissions of 95 grams of CO2 per kilometer in natural-gas operation. If the customer uses Audi e-gas, he is actually driving the A3 g-tron CO2-neutral. But more about that later.

The second new model presented in Geneva was the Audi A3 e-tron. This plug-in hybrid manages 35 grams per kilometer. Apropos e-tron: We impressively demonstrated the strengths of this Audi-technology on the racetrack in 2012: with the victory of the Audi R18 e-tron quattro in the 24 Hours of Le Mans and with the world record of the R8 e-tron on the Nürburgring. We gained a lot of experience from the work on this record-holder and on our A1 e-tron fleet, especially with regard to high-performance electronics and thermal management. This knowledge is now being transferred into the model series. So for us, the models mentioned are the pacemakers on the way to series-produced electric cars.

But more about our plans for the future later. In the review of 2012, I would first like to talk about another new arrival. Since July 2012, Ducati has belonged to the Audi Group. Fascinating, sporty, fast – that already sounds good, does it not? And it is especially good because after five decades, we have reawakened our company’s motorcycle genes out of their slumbers. With the brands DKW and NSU, we were once the biggest manufacturer of motorcycles in the world.

In the past six months, Ducati has gained us a lot of new friends at our company. And this brand’s fan base is growing not only with us. With more than 44,000 motorcycles, Ducati set a new record for deliveries in 2012. That is approximately four percent more than in 2011. Ducati is in demand all over the world, with continuous growth in Western Europe, Asia and North America.

The biggest single market was the United States with more than 9,300 motorcycles sold – twice as many as in 2003. Why do I mention that? Because the relevant overall market has contracted by more than half in the same period. So Ducati successfully utilized one of the most difficult times in the American motorcycle business as an opportunity.

This is in line with a spirit that connects the two brands – Audi and Ducati – and the people behind them, in the same way as the fascination for emotive products and pioneering technology. Three examples: In autumn, Ducati presented the Hypermotard. Deliveries to customers will begin this year, along with the Multistrada 1200 S Pikes Peak in its new look and feel as well as the new 1199 Panigale R, the top version of the sports motorcycle from Bologna.

Ladies and Gentlemen,

25 minutes by car from Ducati is the Lamborghini headquarters. Our colleagues there can also look back on a successful year 2012. The key figure is deliveries of 2,083 super sports cars, 30 percent more than in 2011. The Lamborghini Aventador was the driver of this growth. 2012 was its first full year on the market. This year, we will follow up with the launch of the Aventador Roadster. Customer interest is enormous. Production is already covered by orders into the second quarter of 2014. Sold out for more than one year!

Excellent conditions for a successful jubilee year: Because Lamborghini will be 50 this year. Lamborghini CEO Stephan Winkelmann put it succinctly last week in Geneva: “We have managed 100 years of innovations in half that time.”

Let us have a brief look at how the past year is reflected in the Audi Group’s key financial metrics:

We increased our revenue in 2012 by about 10.6 percent to the new record level of 48.8 billion euros. We even surpassed the record operating profit of the prior year once again, with earnings of 5.4 billion euros. This is extremely positive, especially against the backdrop of the difficult economic situation.

There are years in our industry in which one reaps, and there are years in which one sows: Our top priority for this year is to invest in future technologies and to expand our capacities. Over the next years, we are preparing for the next major growth step towards two million automobiles. My colleague, CFO Axel Strotbek, will give you some more financial details in a few minutes.

But before that, let us look at the people who have worked hard and passionately to achieve these results. At the end of 2012, 68,804 people worked at the Audi Group. Worldwide, we took about 5,800 new employees on board. Ducati is included in that figure. But we also strengthened our workforce by means of targeted new recruitment.

In Germany alone, we recruited close to 3,000 people, including about 1,600 experts mainly in the fields of electric mobility and lightweight construction. Another 620 skilled workers were given full contracts of employment, most of whom had previously had temporary contracts. And nearly 750 young people started an apprenticeship or dual course of study in Ingolstadt or Neckarsulm. In Győr, our new car plant will go online this year. For that reason, we recruited more than 1,600 new employees there last year. At our site in Brussels, we recruited about 200. When one adds all of that up, more people joined the Audi family in 2012 than ever before in one year.

Ladies and Gentlemen,

each individual at our company has made a contribution so that we can report such positive figures to you today. Whoever contributes to success should also participate in it. That is the reason for our Audi profit sharing. This year, the employees of AUDI AG covered by collective wage agreements will receive an average of 8,030 euros each. In order to further strengthen the company pension, we will recognize an employer-financed addition to the retirement pension obligation of up to 1,000 euros out of the profit share. Our subsidiaries in Germany and abroad have their own arrangements for letting employees participate in their successful business operations.

Before I hand you over to Mr. Strotbek, it is important to me to take this opportunity to say “thank you” to all Audians at all of our worldwide locations. You make my Board of Management colleagues and me proud to be an Audian.

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