Audi profits.

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Cars: Audi lifted by enlarged range
SATURDAY AUGUST 9 1997

By Haig Simonian, Motor Industry Correspondent

Audi, the executive cars subsidiary of Germany's Volkswagen group,
snapped at the heels of BMW and Mercedes-Benz, its bigger rivals, with
sharply higher sales and profits in the first half of this year.
Pre-tax profits soared by 21 per cent, from DM405m to DM489m
($261m), on the back of a 13.7 per cent rise in turnover from DM9.3bn to
DM10.6bn.
The improvement was based on strong demand for the company's
enlarged model range, which appeared unaffected by increasing
harmonisation with other VW group products.
Deliveries climbed nearly 13 per cent to a record 276,000 units in the
period, with waiting lists on some models stretching to six months in
Germany.
Analysts predicted further sales growth as the availability improved of
popular models such as the A3 hatchback and the A6 saloon.
Turnover should also be boosted by continued strong exports as a result of
the weak D-Mark. In the US, where Audi is clawing back business after
poor publicity associated with alleged technical problems, sales rose 34
per cent to more than 17,000 units.
The company declined to forecast profits for the full year. However, Mr
Franz-Josef Paefgen, new Audi chairman, said in June that profits this year
would exceed the DM862m posted before tax in 1996. The company
warned, however, that the sluggish German car market could mar its
performance.
Output of the A3, which went into volume production late last year,
reached almost 67,000 in the first six months. The impact of the new
model on the bigger A4 range was limited, with A4 production declining
from 169,723 to 144,790. Audi said its combined A3 and A4 output now
comfortably exceeded BMW's rival 3 Series.
Production of the A6 range was affected by the introduction of a new
model, explaining the 13 per cent drop in the first half on a year ago.
By contrast, Audi increased output of its technologically advanced but
slow-selling A8 luxury saloon more than 49 per cent, from 4,808 to 7,177.
Future growth will stem from strong demand for the current range, to be
extended from 1998 with a new coupé and convertible.
The company is also believed to be developing an estate version of the A6
and an advanced small car, largely made from aluminium and with
unprecedentedly low fuel consumption.