Audi announced that by May it will have plan to get itself back on track in the automotive market. This announcement comes after a series of consistent slumps that have impeded Audi, causing it to fall behind its competition: Mercedes-Benz and BMW.
Over time, Audi’s profitability has declined. Its return on sales went from 7.8 percent to 6 percent, its European sales fell by 14 percent and its global deliveries dropped by 3.5 percent. This decline is due to the current climate of the automotive industry; including the Worldwide Harmonized Light Vehicle Test Procedure, escalated ramp-up costs and escalated advance expenditure for electric vehicles. The increased spending on electric cars and the new emissions test in Europe that have already begun to affect the organization. Take, for instance, the incident that took place last year: multiple Audi deliveries to Europe failed and costed dearly when Audi did not have enough time to make its vehicles WLTP compliant.
To counter these obstacles and recent decline, Audi has decided to head into 2019 as a transition year. While Audi knows a transition year will most likely cause financial strain, it is confident that the results will make it worth it.
Before Audi releases its new plan, it will continue its present turnaround plan of conserving costs and ramping up production. By May 23, at its annual meeting, Audi says the final plan that they propose will help in improving plant capacity, employing the bundle of platforms and producing new vehicle construction. Besides the plan, Audi wants to also focus on two things: high-end cars, electric vehicle effort.
Audi wants to produce more high-end cars; reconstructing the entire lineup of vehicles they offer at the moment. It will pay particular attention to the upper premium, upper mid-range and full-size segments. Audi’s goal is to have increased its number of models to 15 by 2025.
Lastly, Audi wants to expand its presence in the electric, green vehicle movement. In 24 months, it plans to produce 5 full-electric and 7 plug-in hybrid models. Past that, by 2025, Audi wants to have 30 electrified cars in its lineup.