Volkswagen Will Add 8 Audi Models to Challenge BMW

Volkswagen AG’s Audi brand plans to add eight models by 2015 as it seeks to challenge Bayerische Motoren Werke AG as the world’s largest maker of luxury cars.
Audi budgeted 7.3 billion euros ($10.5 billion) in investments on new models and plant upgrades through 2012, the Ingolstadt, Germany-based automaker said today in a statement. Spending on new models will total about 5.9 billion euros, or 81 percent of the budget for the period that includes 2009.

The investment is part of Wolfsburg, Germany-based Volkswagen’s plans to spend 25.8 billion euros between 2010 and 2012 as it seeks to become the world’s dominant automaker. Audi, which ranks third behind BMW and Daimler AG’s Mercedes-Benz brand, will increase its lineup of cars and sport-utility vehicles to 42 models by 2015 from 34 now, it said today.

The new vehicles will include the A1 compact, which is due to be introduced in mid-2010. As BMW develops a line of small urban vehicles and Mercedes-Benz prepares to invests 1.4 billion euros to expand its small-car lineup, the A1 compact will become Audi’s lowest-priced model, spokesman Armin Goetz said in a telephone interview today.

Next year, Audi will also introduce the A7, a large luxury- coupe that will compete with BMW’s 6 Series and Mercedes-Benz’s CLS. By the end of 2010, the VW unit will start selling a hybrid version of the Q5 SUV, its first vehicle that combines electric motors with a conventional engine. Audi will start producing the e-tron electric-powered sports car by the end of 2012.
Sales Target

Development of electric- and hybrid-powered cars and improvements in existing engine technology will “lay the foundations for our company’s growth,” Audi Chief Financial Officer Axel Strotbek said in the statement, adding that the unit will finance the investment from its own cash flow.

Audi, which raised its target for 2009 sales on Nov. 9 by 2.8 percent to 925,000 vehicles because of growth in China, aims to sell 1.5 million vehicles by 2016. BMW’s namesake brand is forecast to sell 1.02 million vehicles this year, while Mercedes may deliver 950,000 cars and SUVs, according to J.D. Power and Associates.

Mercedes aims to increase sales to 1.5 million vehicles by 2015, while BMW, which also sells Mini and Rolls-Royce vehicles, is targeting deliveries of 1.6 million to 1.65 million autos by 2012.

Volkswagen, Europe’s biggest carmaker, has a goal of overtaking Toyota Motor Corp., the world’s biggest, by 2018 in terms of global deliveries and profit margins.