Ralph Weyler, Member of the Board of Management of AUDI AG Marketing and Sales Presentation at the Annual Press Conference 2007

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March 1, 2007

Ralph Weyler, Member of the Board of Management of AUDI AG Marketing and Sales – Presentation at the Annual Press Conference 2007
Source: Audi AG

Article Index:

Rupert Stadler (Chairmain) Part 1

Ralph Weyler (Board Member for Sales)

Rupert Stadler (Chairman) Part 2

Ladies and Gentlemen,

Chart: Worldwide by models

Audi was very successful in 2006 on the international markets. We acquired over 76,000 customers last year.

The outstanding product range was a key factor here. The newly launched Audi Q7 exceeded our expectations, with over 52,000 units sold. The new version of the Audi TT was launched in the autumn. The Audi A3 and Audi A6 each sold over 20,000 more units than in the previous year. In the intensely competitive D segment, the A8 enjoyed growth of 5.5 percent. The A4 is slightly down on the previous year due to the current phase of its life-cycle. The withdrawal of the Audi A2 from production was compensated for in full.

A glance at our development by segment reveals that we achieved marked growth in terms of quality as well as quantity. The share of high-prestige, profitable models in the C and D segments (in other words A6, Audi Q7 and A8) rose from around 26 percent to over 34 percent.

One illustration of the high prestige that the Audi brand enjoys is the choice of engine: over one-third of customers opted for a 6, 8, 10 or 12-cylinder version.

The level of optional equipment ordered has also risen. Revenue from the Audi A6 has been increased by around 70 % over the past five years, thanks to optional extras, and in the case of the Audi A8 it is actually 90 percent. We are furthermore selling increasing numbers of vehicles for over 100,000 euros. In 2006, we for instance sold a heavily-armoured A8 for one specific customer at a price of 519,000 euros.

The positive trend for our Genuine Accessories supplies yet further evidence of the rising value of our sales. Revenue grew by 22 percent compared to previous year.

We are the leading seller of four-wheel-drive vehicles in the premium segment. One in three Audi cars sold has quattro drive. We enjoy a dominant lead over the competition particularly for model versions where four-wheel drive is optional, in other words saloons, Avants, coup├ęs and cabriolets. All our models in the current range are available with quattro drive.

We are the world market leader in this segment with the Audi A6. This is yet further evidence of how the substance of the products and the appeal of the Audi brand have grown further.

The ten biggest markets account for about 80 percent of our sales. It is particularly satisfying to note that we are growing not only in young, expanding markets, but have also been expanding in certain mature markets in Western Europe for some years now.

China is well on the way to becoming a second home market for Audi. Last year was the first time that we sold over 80,000 vehicles there. We will furthermore continue to grow vigorously in China and extend our long-standing market lead for premium vehicles.

This chart shows how the sales shares by region are gradually shifting in favour of export markets. Though sales overall have risen, in relative terms Germany’s importance is on the wane. Asia’s and America’s share of total sales in particular is growing. Audi is a successful company that operates increasingly on a global scale.

We achieved our best result ever in our exceptionally competitive domestic market. Around 258,000 customers chose an Audi. Our growth of 4.3 percent outstrips the development of the market as a whole, which has in fact stagnated for about the past five years.

The picture becomes even clearer when we look at the development in market shares. At 7.6 percent, we achieved our largest share for 26 years.

Our products are likewise increasing their market shares in Western Europe excluding Germany. The highest growth rates in this respect were achieved in Sweden, Spain, France and Belgium.

We are also achieving impressive growth rates in Eastern Europe. The most notable of these is Russia, where we are market leader in the premium segment with growth of 60 percent.

Our objective in the USA is profitable growth. In other words, our emphasis is on profitability rather than volume. With vehicle sales reaching 90,000, Audi achieved a growth rate of 8.5 percent. We sold over 10,000 of the Audi Q7 in the USA, giving this model increasing significance in the SUV segment.

New markets play a decisive role in Audi’s growth strategy. In these markets, the sales organisation and communication work to develop brand awareness and image are particularly important. These markets exhibit considerable dynamism and offer major prospects for Audi. In 2006 Audi recorded strong double-digit growth rates in the Middle East, Russia, China, South Korea and Australia.

An important component of further strengthening our position involves increasing the appeal of the Audi brand via our dealer organisation as well as via our products. Audi has consequently launched a marketing and sales initiative in addition to its product initiative.

Our aim is to establish a presence at strategically important locations in major cities, via our showrooms and forums. Here are some pictures of the opening of the Audi Forum in Park Avenue, Manhattan, by New York’s Mayor, Michael Bloomberg. In 2006 we also opened facilities in Saudi Arabia, Tokyo and Hong Kong, the latter actually being the city’s largest car showroom.

Audi has embarked on a comprehensive qualification initiative for the dealer organisation via the Q-Power programme. We also want to become the most successful premium brand for customer satisfaction and loyalty.

We enjoy a similarly strong position in China. Audi not only comes top of the J.D. Power ranking for reliability and quality, as in previous years, but is now also the leader for customer satisfaction with sales and service. We will continue to expand the exclusive Audi dealer network.

It is particularly important to us that our dealers are satisfied and motivated. In the survey of German dealers conducted by the magazine “autohaus”, of the brands featuring in the comparison Audi dealers are the most satisfied with their manufacturer’s management approach.

Our long-term aim is to be the leading premium brand in every market. Our strong image position in Germany has been confirmed by the recently published ams reader poll. Audi is right out in front for both quality and emotion.

Chart: Wild Oats Regatta

Audi’s presence at prestigious sporting events likewise contributes towards Audi’s outstanding image. We will continue to step up our involvement in winter sports, golf and also sailing, in order to keep Audi on course for success.

Ladies and Gentlemen,

As you can see, Audi is well primed to achieve its strategic objectives. Thank you for your attention.

Article Index:

Rupert Stadler (Chairmain) Part 1

Ralph Weyler (Board Member for Sales)

Rupert Stadler (Chairman) Part 2

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