Automotive News - December 1, 2008 - (Page 42) 42 • DECEMBER 1, 2008 Audi CEO: We’re on track for record year Despite the global financial crisis, Audi remains on track to top 1 million sales worldwide this year. That would be the 13th consecutive record for Volkswagen Group’s luxury unit. The company’s goal to become the world’s most successful premium auto brand by 2015 also has not been derailed by the global slowdown, says CEO Rupert Stadler. Even so, in a wide-ranging interview with Automobilwoche Editor Guido Reinking and Staff Reporter Pia Krix, Stadler admits he is bracing for troubled times. The interview has been translated from German. fortunately we are now gaining positive market momentum across our product portfolio. The Q5 has just reached dealers, the A6 and A3 have been upgraded, and the A4 is going tremendously well. We have the youngest model lineup, and we will bring other fascinating models to market. The preconditions are good, but that doesn’t mean that we aren’t moving deliberately. You don’t seem to lack self-confidence, given that you are expanding your main Ingolstadt, Germany, factory despite the general economic downturn. We are expanding it as planned for the Q5. We aren’t going to freeze our product program or call our longterm growth strategy into question. What long-term effects will the financial crisis have on Audi? One thing is clear: Audi can’t extract itself from the current uncertainty and will be affected. A few months ago steel and oil prices exploded, and then subsided to a level Q&A Would you consider manufacturing jointly with Porsche in the United States? If there is a benefit for all the participants, that would be a great advantage from an economic standpoint. where we can offset this, perhaps through European policy in the form of support for research and development of new technologies. But aren’t subsidies a sign of weakness? If a national competition for subsidies were to break out, that would be a competitive weakness for all of Europe, at any rate. So we aren’t calling for subsidies but, rather, investment incentives. If, for example, we were successful at really advancing technologies in Europe with them in a concerted campaign, would you find that amiss? I wouldn’t. Within the EU, a delay in the CO2 limits is being discussed. Which would you rather have: more time to reach these numbers or more money to further develop the technology? I would rather have more time, meaning an appropriate time frame for introduction that acknowledges our product cycles. The German industry has accepted the targets, but we haven’t made any secret of the fact that there are clear conditions for actually being able to reach these very ambitious goals. The time frame is one of them. Good solutions always require time. In this regard, money alone doesn’t take us any further. You are on the home stretch for breaking through the million mark in annual sales. That would be Audi’s 13th record in a row. Is No. 14 planned for 2009? A successful company should absolutely require that the string be extended. That applies in times of crisis as well. Audi is progressing well, but not every development is in our hands. And the course for our company naturally has been increasingly overlaid with tough external factors just in the last few weeks. In seven years, you want to be the most successful premium manufacturer in the world. Your rivals BMW and Mercedes are already faltering. Can you reach your goal more quickly than planned? We certainly won’t celebrate if things are going worse for our rivals than for us. And we aren’t announcing our success based on that because no one can foresee the real effects of the crisis. But our goal is intact. We want to be the most successful and attractive premium brand by 2015, and that means still more work. c Audi CEO Rupert Stadler While your competitors have issued profit warnings and frozen production, you are heading toward another record year. Has the global crisis in the financial markets left you untouched? Certainly not, since we don’t live on the island of bliss. The economic crisis hits everyone in some way, but you could not have imagined. The dollar fell below 1.25 euros, and, on the other hand, things were going wild at the banks. I haven’t joined the ranks of the pessimists, but there is no question that we have to prepare for unsettled times. You are also dependent on your suppliers. To what extent are you taking care that none of them goes bankrupt? We turn to insolvency management at our Volkswagen parent, where Audi has a leading role. Due to liquidity bottlenecks, a supplier sometimes slips into financial imbalance. We then amicably look for solutions that serve both sides. The supplier should have the entrepreneurial room to maneuver that it needs, and we make sure that our production flow is not impaired. No one can say whether that will continue to work in the aggravated situation we have today. Do you source certain parts from just one supplier, and could you have serious problems if that supplier filed for bankruptcy? That is true for every manufacturer. We are not alone in that respect. We talk to our partners in the supplier industry and try to take countermeasures early when difficulties emerge. Given the high complexity and the dependencies within the auto industry, it gets tough for us when a crisis looms in one corner. We will continue to pursue our growth strategy. Even in times of crisis, a good product is the most persuasive argument that you are better than the competition. It’s possible that our growth curve over the next two years will proceed differently than we could plan on so far. We will continue to grow, and our product portfolio is the best precondition for that. But we naturally need buyers for that, along with the appropriate market. Are you reconsidering your plans for a U.S. factory? If we have the appropriate product at the right time, we will decide on manufacturing in the U.S. It is to our advantage that we can proceed jointly with our parent company should the situation arise, and we can use a single factory. How is the cooperation with Porsche going? At the working level, engineers have cooperated successfully for years. They exchange their findings, creating valuable synergies. I welcome the fact there is now a committee of the supervisory board that confirms joint projects involving Porsche and Audi. That brings clarity for both teams. Porsche is benefiting from your expertise in diesels and electronics. Is that a one-way street, or does Audi also benefit from Porsche? The street can be traveled in both directions. And Porsche gets our 3.0liter TDI at the market price. We have undertaken fair negotiations, where the goal is to benefit both sides. Porsche CEO Wendelin Wiedeking is no friend of subsidies. Now that the Detroit 3 are seeking a loan from the U.S. government, the European Union wants to support its industry. Does Audi need financial help? Basically, we don’t need subsidies or any loans, either, because we can finance our investments under our own power. As a global industry, we have to keep an eye on the competitive situation around the world, and we cannot allow any competitive distortions. Financial help for the U.S. auto industry changes the picture to our disadvantage. 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