Rupert Stadler, Chairman of the Board of Management of AUDI AG Presentation at the Annual Press Conference 2007 – Part 1

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March 1, 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,

A warm welcome to the Audi Annual Press Conference from myself and my Board of Management colleagues! I hope you enjoyed your evening event yesterday and have high expectations of what’s coming up today. Audi is well on the road to success, and we can thus offer you a wealth of positive headlines today – something which may well make a welcome change for you…

The year 2006 at Audi has been dominated by a host of attractive new products. Last year we launched twelve new models and model versions in twelve months – a tremendous figure!

We have already successfully launched the following products:

  • The Audi Q7,
  • The new A6 allroad quattro,
  • The new TT Coupe,
  • The new RS 4 models – Limousine, Avant and Cabrio
  • The S8, the S6 and the S3.

    The new TT Roadster celebrated its world debut at the Los Angeles Motor Show in November 2006, and it will be available in our dealers’ showrooms from March. Like the TT Coupe, the Roadster has long enjoyed cult status. And I am sure that it will be even more successful than its predecessor.

    And both new TT models feature a particularly large number of groundbreaking innovations. Examples of these are the combination of steel and aluminium in body construction, the magnetic ride damping system and the high-quality acoustic hood. Thanks to this hood, we are able to offer a convertible which is just as quiet on the road as a cabrio with a folding hardtop model and which offers a practical luggage compartment with the hood down, too.

    The Audi R8 is the ultimate expression of our premium strategy. We have wanted to this for a long time. It helps the Audi brand advance even further and gives it an emotional charge. Because this handcrafted sports car sets new standards of dynamism, driving fun and design.

    Just a few weeks ago, more than 300 journalists from all over the world were given the opportunity to drive the R8 through Nevada’s desert. I also did so.

    That experience evidently captivated not only me, but also the journalists, because the media response was overwhelmingly positive. Here are just a few quotations from the press. The R8 is often compared to exclusive sports car brands such as Ferrari. I don’t need to make any further comment. It was very important to us that the R8 brought Audi’s DNA into the sportscar segment. I have some good news for all those who are longingly awaiting the R8: it will be appearing on the market as early as April.

    All new products from the Audi brand met with a rapturous reception.

    And the worldwide success of the four rings is also embodied by the numerous awards that we received for our vehicles during the past year. We were absolutely delighted at each one of these accolades, even if at this rate we’ll soon have to extend Audi’s site to make room for all these trophies.

    I propose to start by commenting on the key figures of the past year. Our Board Member for Sales, Ralph Weyler, will then present the sales developments in the most important markets. In the second part of my speech, I will then report on the company’s earnings, focus on the current situation at Audi and take a look forward to the future.

    We sold 905,200 vehicles to customers last year – more than ever before. That represents an increase of 9.2 percent on the previous year.

    When we look at Audi’s progress over the past eleven years, we see that the company is on a steady upward curve – even if at times the economy in general has been experiencing difficulties. 2006 was the eleventh record-breaking year in succession.

    We established new records in an amazing 41 markets in 2006! We made substantial progress particularly in the major European markets. Herr Weyler will be providing further details on that subject in a few moments.

    I would now like to say a few words about our subsidiary Lamborghini. The previous sales record of 1,600 was easily beaten last year: 2.087 of our super sports cars were shipped to customers in 2006, predominantly in Germany, the USA and other Western European countries.

    I will now move on to other key figures of the Audi Group: the vehicle production volume at Audi and Lamborghini rose by 14.1 percent to 926,200 units. This meant that not only did we establish a new sales record for the eleventh year in a row, but we also set a new production record.

    Engine production at our Hungarian plant in Gyor rose by 12.0 percent to 1.9 million units.

    The number of employees within the Audi Group at the end of December was around 52,500, in other words roughly on a par with the previous year.

    Audi provides secure jobs for around 45,000 people in Germany alone, not including those in upstream and downstream industries. Our employees are our most prized asset. Because Audi owes its huge achievement above all to the outstanding performance of our highly motivated team. We therefore paid out a share of the profits to employees last year as a profit-related element of their remuneration. And we will pay out a share of the profits to employees once again this year, too. You will find more details in your press folders.

    Ladies and Gentlemen,

    Even in this age of globalisation, Audi’s innovations are “made in Germany”! We stand by Germany as an industrial location, even if labour costs here are undoubtedly high in international terms because of the high skill levels of all our empoyees.

    We may be a German company at heart, but we think and act internationally. And we of course also have production locations abroad for example in Hungaria and China. Whenever we need to identify a production location for a new model, all the possible venues of course have to prove that they can build it on internationally competitive terms. Our recent choices of production locations for the R8, A5 and Audi Q5 models prove that this is possible in Germany.

    At the same time we will take advantages of any opportunities which may arise for establishing competitive production sites abroad, should we require these capacities.

    Ladies and Gentlemen,

    The efficiency of all corporate processes is a basic prerequisite of surviving international predatory competition. By optimising our processes, we will be able to have more vehicles built by virtually the same number of employees. This volume growth is an elementary component of our strategy of safeguarding the jobs we provide in the high labour cost environment of Germany.

    Audi is already in a very good position. But there is always scope, in every area of the company, for improvements and for making the company even more competitive. To this end we have further intensified our continuous improvement process that encompasses all employees. Its purpose is to

  • Keep reassessing existing structures in every area,
  • Make suggestions for improvements, and
  • Introduce new and even better standards.

    We at Audi are not satisfied simply with doing things well. We have the iron resolve to do the things we are doing well even better. This does not just refer to internal processes. Nor does it just refer to business figures. It applies to every aspect that is of significance to a premium manufacturer. Audi will be number one for

  • Product quality,
  • Image,
  • Design,
  • Sportiness,
  • Innovation,
  • Dealer and service quality,
  • Environmental compatibility, and
  • Most important of all: customer delight.

    In this way we will build sustainable basis for profitability and investment. The entire board is together on this matter. We believe in it wholeheartedly and are happy for you to measure our progress.

    That is all from me for the time being. Thank you for your attention. I will now hand you over to our Board Member for Sales, Ralph Weyler, who will present the sales figures for our products in the various markets.

    Article Index:

    Rupert Stadler (Chairmain) Part 1

    Ralph Weyler (Board Member for Sales)

    Rupert Stadler (Chairman) Part 2

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