Audi investing in its flagship site in Germany to catch up with Bmw, Mercedes-Benz

Article by Christian Andrei, on July 17, 2012

Audi is investing hundreds of millions of euros in its flagship site in Germany as part of a strategy to catch up with BMW and Mercedes-Benz. What’s very visible at the site right now is a line of cranes, which plant manager Peter Koessler pointed out. The Ingolstadt plant produced nearly 50% of the 1.3 million units that Audi sold in 2011.

This plant doesn’t only produce cars, it’s also the training ground for an expansion plan that’s much grander as Audi boosts production in countries that have lower cost and have faster growth such as Mexico and China. This plant had also set up a body shop that’s valued at about 300 million euros or $368 million. Koessler told Reuters that customers will be getting is the quality that they’re accustomed to.

He said that the location of the factory isn’t an issue. He also said that engineers will be sent to the new foreign plants while local workers would get some training in Germany to make sure that the cars they make would match Audi’s standards in its headquarters.

Several mass-market automakers like France's PSA/Peugoet-Citroen and Germany's Opel are struggling while the European market weakens. However, premium brands such as Volkswagen-owned Audi are doing better as their richer customers are not as affected by austerity measures imposed by the government. They would also record gains from the strong demand in growing markets.

Audi’s sales in June had increased by 13%. The overseas expansion is different from what the company did in the past 20 years or so when Audi concentrated mostly on its facilities at home even as the focus of rivals like BMW and Daimler's Mercedes-Benz is towards the overseas markets.

About five years ago, Audi still built about 82% of its units in Ingolstadt and Neckarsulm, Germany. Koessler said that the company requires additional capacity to support its (global) growth strategy. He cited Audi’s aim that by 2020, its sales will increase by half to 2 million vehicles. [source: Automotive News  - sub. required]

Topics: audi, bmw, mercedes-benz

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