Volkswagen’s Audi Group has posted financial results for calendar 2012 that, while including significant sales gains in the expected markets, reflect what was described at the presentation here in Ingolstadt as an “increasingly difficult economic environment”.
Audi said that it delivered 1.46m cars to customers last year, up 11.7% on the previous year. Revenue rose 10.6% to EUR48.8bn but the operating profit hike was just 0.6% to EUR5.38m. After tax profit slipped 2% to EUR4.35m. Operating return on sales also fell, to 11% from 12.1% in 2011.
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Audi will transfer EUR3.79m of profit to parent VW (EUR3.14m in 2011) but shareholders saw reduced earnings per share of EUR99.62 (EUR102.06).
But the good news engulfs the bad. All world regions apart from Western Europe saw growth last year with Audi usually above individual market rises. Highlights included Russia up 44.1%, China up 29.6% and record sales in the UK where Audi is snapping at BMW’s heels for premium segment leadership.
2013 challenges
Chairman Rupert Stadler highlighted the challenge in Europe with Spain where sales are now at 1979 levels. “Effectively, we’ve lost 33 years,” he told a packed press conference.
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By GlobalDataAudi also said it is aiming for 8-10% operating return on sales this year vs 11% in 2012.
“This year will be at least as challenging as last year,” Audi chairman Rupert Stadler said.
The World Bank’s global growth forecast is just 2.4% and Stadler expects car markets to “fall considerably” after rising 7.9% last year.
Audi, he said, will grow. January/February volume was up 9.4% for a “good start to the new year” though he acknowledged two months was “just a snapshot”.
Audi will continue to spend on capacity to support its goal of selling 2m cars a year by 2020. The 1.5m milestone should be reached early by 2015; capacity has been boosted 360,000 in the last two years.
The next three years will see a record EUR10bn spend with EUR5.3bn of that in Germany; Stadler claims a new Audi is sold ever 22 seconds.
The automaker is hiring 1,500 in Germany and making 500 temporary workers permanent. A new plant to open this year in Foshan, China, adds 300,000 units, more engines will be made in Hungary and Mexico starts making 150,000 Q5 SUVs in 2016, marking the first time an Audi has been made for the world outside Europe (the Q3 is made by Seat in Spain). “Only a global presence can insulate us from individual market fluctuations,” Stadler said.
Established markets will also be squeezed for additional sales juice. An example includes the US where diesel engines are being promoted and customers encouraged to have cars built to order rather than accepting ‘near enough’ from dealer stock.
