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Audi to spend $17 billion to fight BMW

It's no secret that VW Group, parent company to not only Volkswagen but also Audi, Bugatti, Bentley, Lamborghini, Porsche and Ducati brands sold in the US, is determined to become the world's largest automaker. Even more impressive is that VW is prepared to spend billions to make it happen.
With that comes word that VW Group will be spending $17 billion on its Audi brand over the next three years to push itself above rival BMW. The money will be invested in both vehicle development (including lightweight auto design and alternative powertrains) and facilities (including expansion in Hungary, China and new operations in Mexico). The luxury brand is focused on global manufacturing infrastructure.
Already Europe's best-selling luxury brand, Audi's objective is to overtake BMW by the end of the decade by selling more than two million cars per year (BMW is shooting for 1.54 million sales in 2013). If those objectives are met, VW Group should be on track to be the industry's volume leader by 2018.

Audi will spend less on future technology as it focuses on future technology

It seems the very thing meant to be saved by Audi curtailing spending could also take a hit as a result. A report from Reuters outlines a few ways Audi will cut costs in the wake of its parent company's diesel scandal. While focusing on EVs, autonomous driving, and new connected technology instead of its current vehicle portfolio, Audi is axing plans for a track to test self-driving cars as well as facilities meant to produce new concepts and batteries. Or, you know, exactly the kinds of things Audi is now focusing its efforts on. Some of this shouldn't come as a surprise. We already know about the death of the R8 E-Tron, a low-volume EV that wasn't going to make the brand much money and didn't pan out as a halo electric car quite like the company probably hoped. Then there's the new E-Tron crossover, which has been in the works for a while and will head a line of consumer-grade EVs from the brand – the kind that will make money as long as they sell in mass-market numbers, something Tesla has shown is possible. That project is surely safe, although perhaps it will now take longer for the EVs to gain autonomous abilities. This change in funding direction could mean that the planned autonomous track, dubbed IN-Campus as it was to be located in Audi's home of Ingolstadt, was going to be more for show than actual research, or that Audi thinks it can get the same outcomes in its existing facilities or new ones located elsewhere. (The company's work council is upset by the plan being put on hold, as it could mean more jobs leaving Germany.) There's also the very strong possibility that this provides a welcome opportunity for the company to cut some fat. Reuters notes that Audi spends more on R&D than rivals BMW and Mercedes-Benz, despite having the whole VW Group to leverage. While the diesel scandal was certainly not welcome, it may be forcing Audi and the other Group brands to take a closer look at balance sheets than they otherwise would have. The result of all of this could be a leaner company, assuming too much attention doesn't stray to low-volume EVs and away from what are still the core products. Related Video: News Source: ReutersImage Credit: Reuters Green Audi Technology Crossover Autonomous Vehicles Electric audi e-tron

Volkswagen finds CO2 'irregularities' for 800k vehicles

The latest issue for Volkswagen affects another 800,000 vehicles, and this time its for irregularities in CO2 emissions certifications. VW estimates this issue could cost the company $2.2 billion to fix. The company officially makes no specific mention of which engines are covered, the models they are in, or even where they are located. VW discovered the situation during its ongoing internal investigation, and, according to the automaker, "it was established that the CO2 levels and thus the fuel consumption figures for some models were set too low during the CO2 certification process." Most of the affected vehicles are diesels, and the company is now reaching out to "the responsible type approval agencies" to figure out the next step. While VW isn't officially confirming which models and engines are involved, Automotive News reports that it affects some 2012 and later VW, Audi, Seat, and Skoda models with the company's 1.4-, 1.6-, and 2.0-liter diesel engines, as well as the 1.4-liter ACT gasoline engine. The issue mainly affects vehicles sold in Europe. "The Board of Management of Volkswagen AG deeply regrets this situation and wishes to underscore its determination to systematically continue along the present path of clarification and transparency," CEO Matthias Muller said in the announcement. Volkswagen Group of America spokesperson Jeannine Ginivan was able to provide some further clarification to Autoblog. "This is not related to US-certified vehicles," she said. Clarification moving forward: internal investigations at Volkswagen identify irregularities in CO2 levels Matthias Muller: "Relentless and comprehensive clarification is our only alternative." Around 800,000 Group vehicles could be affected Initial estimate puts economic risks at approximately 2 billion euros The Volkswagen Group is moving forward with the clarification of the diesel issue: during the course of internal investigations irregularities were found when determining type approval CO2 levels. Based on present knowledge around 800,000 vehicles from the Volkswagen Group could be affected. An initial estimate puts the economic risks at approximately two billion euros. The Board of Management of Volkswagen AG will immediately start a dialog with the responsible type approval agencies regarding the consequences of these findings. This should lead to a reliable assessment of the legal, and the subsequent economic consequences of this not yet fully explained issue.