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Audi spending an additional $2.5 billion on expansion through 2019

Every year, it seems the Volkswagen Group announces a new and larger spend to push growth and profit, with Audi a regular recipient of the moolah. That's reasonable, seeing as hauls in 40 percent of Group operating profits. In December last year Audi said it would spend an additional 100 million euros ($122M US) per year through 2018 to develop new models and expand production, targeting 60 models by 2020 and luxury sales leadership. This month Audi said it will boost that by another two billion euros ($2.5B US) over the next five years, for a total outlay of 24 billion euros from 2014 to 2019. Something like 70 percent of those billions will be spent on new models, technology like "connectivity and lightweight construction," and factory expansion at its plants in Ingolstadt and Neckarsulm. Most of the ten models that will plump the lineup to 60 cars will mainly be aimed at the C and D segments, as well as crossovers, the brand's burgeoning portfolio of PHEV models, and all-electric cars that will begin staking ground in the segment. The big spend comes at the same time as Audi is working hard to reduce costs by $2.5 billion to maintain profitability, part of a larger push by VW to cut costs by $6.1 billion by 2017. More than a billion euros will go to new factories in Mexico and Brazil. Work begins on the Mexico plant next year, and when it comes on-line in 2016, Audi's Q5 successor will roll out of its warehouse doors; Audi has already announced it will hire 850 more workers next year in Mexico. When that's done, Mexico's production of German luxury cars will only trail that of Germany, China and the US. The company's Brazil plant will produce the A3 and S3 starting next year, and the brand figures luxury car buying there will triple by 2017. News Source: Reuters Earnings/Financials Plants/Manufacturing Audi Volkswagen Luxury Mexico Brazil ulrich hackenberg

Looking for meaning in Audi killing off its $1m electric supercar

Audi's most ambitious - well, most expensive, anyway – electric vehicle is no more. After building fewer than 100 of them (perhaps a lot fewer), Audi has cancelled the R8 E-Tron. Maybe it was the million-dollar-plus price tag. Maybe it was the " supreme hand-built quality." Maybe it was the fact that a non-electric R8 could be had for $164,150. Whatever the reason, was killing the R8 E-Tron a good idea? The R8 E-Tron would have been a good halo vehicle for the brand Here's the case for this being a shortsighted move. As we all know, the VW Group – and Audi especially – is in the middle of an electrification kick, and the R8 E-Tron would have been a good halo vehicle for the brand. Instead, it can stand as a prime example of waffling on the promise of plug-in vehicles. After all, Audi used to be incredibly proud of the R8 E-Tron, even if it had a tough history. The whole program was an on-again/ off-again kind of thing, but with enough momentum to get the EV some time at the Nurburgring. With both Mercedes and the EQ brand and BMW with its i brand moving strong into EVs, letting the headline be "Audi killed an EV" is not exactly fitting. It's not like Audi was wasting time making a lot of these. The R8 E-Tron went on sale in 2015 to customers who made a special request for it, and apparently only 100 did. But let's stop there. Getting 100 people to plunk down a million dollars or so for a car totals up to be a lot of money. There's no reason for Audi to price the car this high (forerunner vehicle programs almost always lose money for a time, just ask Toyota RE the Prius), but it did. And $100 million (if almost 100 were indeed sold) is nothing to scoff at, is it? It obviously wasn't enough to keep the lines and tooling open for this limited vehicle, and that sort of opens up a bigger question. Does the end (the second end, really) of the R8 E-Tron say something more important about EVs? Are they becoming less exotic high-end fixtures and more everyday transport? In a world full of Bolts and Ioniqs and E-Golfs – so, the world of 2017 and beyond – does a super high-end EV have any meaning? Gas-powered cars have managed to pull this off for decades, with Lamborghinis and Maseratis surviving just fine even with millions of Corollas out there. In a more-developed EV ecosystem, expensive EVs like the R8 should be able to do the same. Just not right now.

VW could fight Uber Black with Porsche and Audi vehicles

Last week, the Volkswagen group dumped $300 million into Gett, a taxi hailing-cum-ride sharing app that's big outside of the US. Now, the company has revealed that it's pondering a rival to Uber Black by offering private drivers access to its higher-end vehicles. Details are scarce since it's a single line reference in a very long press release, but VW says that it's looking at a "special chauffeur service" that features "premium brands, such as Audi and Porsche." What that looks like in reality is anyone's guess, although the idea of getting ferried around in an Audi RS 7 does have some appeal. The deal with Gett will concentrate on getting Volkswagen cars into the hands of Gett's drivers with the promise of juicy discounts. For instance, the firm will offer a special package that'll bundle car insurance and servicing with the purchase price, which can be paid by a would-be operator in installments. It's a similar deal to the one that Uber offers would-be drivers, letting them buy cars from manufacturers like Volkswagen, Ford and Toyota at a discount. Uber, however, also lets prospective cabbies rent their vehicle on a monthly basis, thanks to a deal with Enterprise. Both of which will likely become more muscular now that Uber has a further $3.5 billion in its back pocket. The troubling fact for the auto industry is that people will still need cars, but it's likely that they won't need as many as they do right now. On-demand services and self-driving vehicles are, after all, intended to shuttle around cities like an ersatz taxi-cum-metro system rather than sitting in parking lots. The concepts of ownership that we currently hold dear (and the profits that car companies get from them) are likely to fade away in the next, say, fifty years time. As such, conglomerates like VW will have to reinvent themselves as both manufacturer and transport company in one. But these changes are never easy, especially when the biggest car firms have tons of baggage that slows down their progress. Many are still devoting time and resources to producing thousands of new cars with combustion engines that will be on the roads for years to come. Looming in the shadow, however, is the emissions scandal, with the financial and reputational penalties likely to be felt for years to come. Younger, more nimble rivals without legacy businesses, like Tesla, are working on mass-producing electric cars for mass-market prices.