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Audi: record profit as 'biggest product initiative' in its history gets underway

Audi Group CEO Markus Duesmann   Even as the Audi Group (VOW.DE), VW’s luxury division, is in the midst of a huge EV transformation it still needs to perform where it counts — the bottom line. And so it is doing just that.  On Thursday the Audi Group - which is dominated volume-wise by Audi, but also includes Bentley, Lamborghini, and Ducati - posted record revenue and operating profit in 2022. That shouldnÂ’t be a surprise given what the industry has been seeing at the highest end of the market - record performances despite macroeconomic jitters across the globe. But that it's happening as the group is noteworthy.  “We are on the verge of the biggest product initiative in our history,” Audi Group CEO Markus Duesmann said at a news conference earlier on Thursday. “By 2025, we will have launched around 20 new models, more than 10 of which will be all-electric. We have set the course to go 100% electric. By 2027, we seek to offer an all-electric vehicle in each core segment.”   This is all part of Audi GroupÂ’s Vorsprung 2030 plan, which seeks to have all of the groupÂ’s new models be electric by 2026 — and to end traditional gas-powered engine production by 2033. To that end, the group saw EV deliveries jump 44% (in 2022) compared to 2021 to over 118,000 vehicles, with the share of EVs rising to 7.2% from 4.8% in the prior year. Audi is also launching its first EV using the PPE (premium platform electric), which was developed together with Porsche. That EV, the Audi Q6 e-tron, will be unveiled later this year. (Past Audi EVs shared corporate parent VWÂ’s electric platform.) “With the Audi Q6 e-tron, e-mobility is coming from Ingolstadt (Audi HQ) for the first time,” Duesmann said in a statement. “To this end, weÂ’re also building a dedicated battery assembly facility on site. This will enable us to retain important know-how here in Germany and train our employees in future fields.” AudiÂ’s German rivals of course are also leaning in hard on their EV transformations. That makes it all the more important that Audi get its EV strategy right—and launched in a timely manner.

2015 Audi S3 Sedan

For the last few years, Audi has been publicly toying with building a successor to its Ur-Quattro, a model still glowing in a gritty patina of motorsports glory decades after it left the scene. If anything, the rally car's halo has burned brighter as Audi has matured into a world luxury superpower. Since 2010, the German automaker has shown two different concept cars that attempted to re-bottle the legend's lightning, and it's still trying to figure out whether to market a production model. Despite that conundrum (and not to take anything away from the seminal Ur-Quattro), it's easy to argue that there are two other cars much more important to Audi's rise from its '80s ashes: the original TT and the B5-generation A4 and its high-performance variants.
The TT thrust Audi into the vanguard of automotive styling while firmly establishing the Volkswagen Group as masters of platform development (the same basic architecture and powertrain guts were employed in a dizzying array of models, from the Golf, Jetta and New Beetle to a number of Škoda products). This unprecedented, flexible building-block approach to new model development has since become the standard of the industry.
In the case of its B5 cars, the A4, S4 and RS4 put Audi back on the radar of rival German automakers, and more importantly, they grew the Four Rings' sales by leaps and bounds while reminding the world that all-wheel drive needn't only benefit hardcore performance cars and utility vehicles. Fast-forward to today, and the A4 has established itself as the bedrock of Audi's lineup, but it's also grown over its four generations to become substantially larger, heavier and costlier than the model that debuted back in 1996 America. That's created a vacuum at the bottom of the range that the company has inadequately addressed - until now.

2013 Audi RS Q3

The year 1994 was a really good year for German performance fans, because it was that year when Audi released its very first official RS model (for "RennSport," or racing sport), the RS2 Avant. Recently, I was invited to participate in a three-day leg of the Audi Land of Quattro Alpen Tour, a blatant flaunting over hill and dale of the company's current lineup of RS models. We hit Austria, Switzerland and Italy - the roads were epic and the weather held for this exquisite boondoggle.
Our chief focus on this tour, which included the RS6 Avant and RS7, was the newcomer RS Q3 small crossover that will absolutely never be coming to North America, but which starts deliveries in November of this year. This no-North America policy is because we still don't have enough customers who see the thrill or sense in a $52,000 all-wheel-drive baby sport utility that gets to 60 miles per hour from a stop in under five seconds. Meanwhile, in crazy, drunken Europe, orders for this ridiculous, wondrous set of wheels have, to quote Quattro head of technical development Stephan Reil, "far outstripped the limited production numbers of the business case." Those silly Europeans, don't they know that an RS Q3 makes no sense at all? Sheesh.