Here in the Bavarian city of Ingolstadt, all roads lead to Audi. Literally.
In a town of perhaps 120,000 people, about one-third work for Volkswagen AG's premium brand. The rest work for those who work for Audi. As Audi's fortunes go, so go Ingolstadt's. Those who have lived in Canadian auto company towns like Oshawa and Windsor know exactly how they live and work here.
Ingolstadt, in fact, is dotted with signs directing visitors to the Audi Forum, the centrepiece of Audi's headquarters here. Some 60,000 new owners collect their Audis at the Forum each year.
The fashionable delivery centre is designed to make each new owner feel like a celebrity for a day. (And no, Canadians are not eligible to participate in Audi's overseas delivery program, though Americans are.)
With delivery comes a free gourmet lunch for the owner and everyone else he or she can stuff into a car. There is also a tour of the nearby Audi museum, and keeners can also tour the factories (about half of all the 900,000-plus Audis that will be sold in 2009 are assembled here).
Despite the global economic conditions, things are quite good here in Audi-town. For now.
Audi this year is by far the biggest contributor to VW Group earnings. In the first nine months of the year, Audi had an operating profit of €1.17-billion ($1.85-billion) and those funds provided the bulk of VW Group's nine-month operating profit of €1.5-billion.
Audi is making money, but others in the 10-brand group are suffering losses, including heavy ones at VW's bargain-brand Seat in Spain and the upscale Bentley brand in England.
In fact, thanks mainly to its strong presence in China, Audi had a 0.4-per-cent sales increase last month to 82,750 cars, although sales for the year through October were down 6.7 per cent from a year earlier to 787,900 cars.
The results are better in Canada, where sales are up 22.2 per cent on the year. In a market where Canadian new-car sales are down 13.2 per cent, and where global new-car sales are down more than 20 per cent, Audi is holding its own.
But Audi has been through enough booms and busts to know that current strengths are no guarantee of future successes.
"Our history, it has been interesting, to say the least," says Audi Canada chief Martin Sander in deadpan understatement.
We are standing in front of the very building in downtown Ingolstadt - now the local courthouse - where in 1949 the Auto Union, Audi's precursor, was recreated out of the rubble of post-war Germany. All that marks the occasion is a bronze plaque affixed beside a nondescript door.
The Audi brand is celebrating its 100th anniversary this month, but the up-and-down Audi story is complicated, filled with booms and busts, big egos and bitter rivalries that turned into alliances.
In North America, Audi has spent more than two decades crawling its way back to respectability after a series of poor management and product decisions were compounded by the celebrated "unintended acceleration" case in the mid-1980s - for which Audi was eventually cleared of any wrongdoing or malfeasance.
Today, Audi has an expanded lineup and more growth is planned. By 2015, Audi intends to be the No. 1 premium auto maker in the world, with sales topping 1.5 million units and a 42-model range. BMW AG, just down the Bavarian road in Munich, is in Audi's sights, says Canadian CEO Sander.
"We have the 2015 plan and it is working," he says, standing among historical Audis in the company museum. "When I started 19 years ago, we were a regional German brand selling 350,000 cars. We doubled that once we had a plan in place." Audi plans to double that again in about five years.
Realistically, Audi's push began in earnest a decade ago when the TT roadster and coupe were added to the traditional three-sedan lineup. In recent years, Audi has added the Q7 SUV and the smaller Q5 crossover, the R8 sports car and the A5/S5 coupe.
Audi is adding clean diesels and gasoline engines that are smaller, more powerful and more efficient. Development also is focused on lighter bodies, hybrid technology and electric vehicles.
The Q5 hybrid is expected in 2011, and there is talk of expanding the hybrid powertrain to other models. A version of an electric luxury car based on the Audi e-tron concept unveiled last month at the Frankfurt auto show is headed for production, with running prototypes due in less than two years.
Next year, the new A8 large luxury sedan is coming, along with a version of the Q5 with a smaller engine (only a V-6 is sold currently). A diesel Q5 is also a possibility. Next year, Audi will also launch the convertible version of the A8, called the Spyder. What we will not get in Canada is the next generation of the tiny A1 that will be launched in Europe.Report Typo/Error
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