Audi Pours Investment into Future-Oriented Projects

Audi Pours Investment into Future-Oriented Projects
Bram Schot, temporary Chairman of the Board of Management of AUDI AG. (Photo: Audi AG)

Audi AG has said it is pouring investment into what it calls future-oriented topics as part of its re-alignment strategy.

From 2019 until the end of 2023, the company say it is planning advance expenditure of around €14 billion ($21.2 billion CAD) for electric mobility, digitalization and autonomous driving.

In addition to the technology itself and R&D, this also includes investments in property, plant and equipment.

Overall, Audi says that its projected expenditure over the next five years will amount to approximately €40 billion ($60.6 billion CAD).

“This planning round bears a clear signature: We are taking a very systematic approach to electric mobility and will be much more focused in future,” said Bram Schot, temporary Chairman of the Board of Management of AUDI AG.

“We are consistently prioritizing our resources for future-oriented products and services that are highly attractive and relevant to the market.” Schot added that, “with models such as the recently presented Audi e-tron GT concept, we want to electrify people again for Audi and at the same time be an agile and very efficient company.”

Beginning with Audi’s first pure electric SUV, the production version of the e-tron, the company says it will launch numerous electric cars in the coming years. By 2025, Audi aims to offer around 20 electrified models, about half of which will have all-electric drive systems. At the same time, Audi is pushing forward with the digitalization of its automobiles and plants and is expanding its business model with new digital services such as “functions on demand”.

Audi says that the share of total expenditure for future topics will increase significantly in order to fund these development costs over the planning period. Within the second half of the planning horizon, Audi plans to significantly scale its electric mobility business on the basis of cross-brand architectures.

To this end, Audi is working with Porsche to develop the “premium architecture electrification (PPE)” for large electric cars, while the “modular electric drive kit (MEB)” is being realized together with Volkswagen.

In order to finance its course for the future from its own resources, Audi says it is systematically rolling out its successful Audi Transformation Plan. With this program, Audi says it is set to generate positive earnings effects of more than €1 billion ($1.5 billion CAD) in 2018, counteracting the financial burden from the high advance expenditure on advanced projects.

In addition to transferring resources to areas of the future, Audi says that its Audi Transformation Plan is primarily aimed at reducing complexity, systematically utilizing synergies, and identifying and discontinuing activities that it feels are no longer relevant to customers.

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