Audi risks being a laggard without new technology

Article by Anita Panait, on November 20, 2013

Vorsprung durch Technik (advancement through technology) has been Audi’s slogan since the 1970s. But it seems that the German luxury carmaker is losing ground on this matter. In 2012, Audi’s r&d budget was far below the amount set aside by both BMW and Daimler, which owns Mercedes-Benz.

As a result, Audi has nothing to boast about while BMW has the new i series and Mercedes has gained positive reviews for its new CLA and GLA ranges. It is now risking being seen as a slacker in the auto industry, in which innovation is considered as one of its main attractions.

Stefan Reimann, a public relations manager, told Reuters that he has grown tired of the single-frame grille donned by Audi vehicles. He noted that BMW and Mercedes have become more progressive now, and that “it is about time for Audi to live up to their promise."

Audi, however, cannot afford to lag behind as it accounted for over 40 percent of the Volkswagen Group's profit of EUR8.6 billion ($11.6 billion) in the first nine months of 2013. This means that Audi’s earnings are vital to financing VW Group’s expansion that is aimed at overtaking General Motors and Toyota as the largest carmaker in the world by 2018.

Any slump at Audi’s results could place some doubts on VW’s VW's broader strategy, as some analysts are wondering whether a new platform aimed at sharing costs among its brands could deliver the expected gains, and whether it has trimmed prices too much to gain market share in Europe.

It might be working as Audi has doubled its model lines and unit sales over the past decade have managed to continually trim BMW's sales lead. In the first 10 months of 2013, Audi sold 1.31 million cars, nearing BMW’s 1.35 million. Audi is also rapidly expanding in emerging markets like China, Mexico and Brazil. [source: automotive news - sub. required]

Topics: audi, technology

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