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Analyst Predicts Audi On Track to Eclipse BMW in Profitability

Agent009 submitted on 12/21/2006 Official Bell & Ross Timestamp: 4:17:01 PM

32 user comments | Category: Misc News | Source: | SOURCE: www.automobilwoche.de

Tag Link: Audi Profits

Incoming Audi boss Rupert Stadler is taking on an enterprise, which seemly continues to run from success to success with each year.

Even with large investments in new upcoming models Audi will go over the 10% mark in capital net yield this year. This is the second year in a row that Audi has surpassed the 9% margin that parent VW expects from the premium division. The projected rise in profit margins are expected to grow further from there.

By comparison Analyst Arndt Ellinghorst of Dresdner, estimates BMW currently is expecting a 11% margin without the same extensive expenditure rates for new models. Oddly enough, the relatively small presence of Audi in the US has work to their advantage by lessening the impact of the weak dollar. Audi will also have a easier time achieving record profitability due to the fact they can leverage parent company VW resources and development costs. Something BMW as an independent will have at a disadvantage for the foreseeable future..

Audi is global sales are expected to exceed 1 million units in 2008 and climb to over 1.4 million by 2015.





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Analyst Predicts Audi On Track to Eclipse BMW in Profitability

About the Author

Agent009

"If everything seems under control, you're just not going fast enough."

— Agent009 (View Profile)


User Comments

chewy

Like I said, can't wait for more excellent Audis. This is good news as well of course.

— chewy (View Profile)

Posted on 12/21/2006 4:36:09 PM | reply to this comment | Votes: -6   

chewy

Where are the BMW fans at?

— chewy (View Profile)

Posted on 12/21/2006 5:31:01 PM | | Votes: -6   

chewy

More like barely working day, am I the only one that has problems with it working?

— chewy (View Profile)

Posted on 12/21/2006 6:11:28 PM | | Votes: -6   

silverarrow2

Do they mean Audi or VW products?

— silverarrow2 (View Profile)

Posted on 12/21/2006 7:06:21 PM | | Votes: -1   

MercBasher

Here's another ridiculous pro-Audi posting from Agent 009. Where does he find this stuff?

Back to the article, as any accountant and politician knows, it is easy for a holding company to shift monies around in order to make the finances of one division (Audi) look good. BMW is a stand alone company and has costs that VW probably keeps at the corportate level.

What gets reinforced in this article is that even though Audi outsells BMW in some markets, and even though Audi can share some development and manufacturing costs with VW it still lags in profitability against BMW.

Way to go Audi!

I yes I can't wait for a more excellent Audi - because there aren't any at the moment.

— MercBasher (View Profile)

Posted on 12/22/2006 3:58:57 PM | | Votes: 1   

Larry

Good news for audi, i wish i could read the article in english. If look at the profit of both companies this year BMW will make about 4 Billion euro net profit vs. Audi's 1.1 Billion Euro, after income tax BMW will net 2.8-2.7 Billion euro vs. Audi 600-700 million euro. (4 times as much) Even through BMW sold some of its Rolls Royce stock (Aerospace company not the brand) over past five years has made about 3 to 4 times more money than Audi. In fact BMW Group makes 2 times as much as VW Group. ( Check the facts on Google ) Now Audi has nice products but I doubt a car like the future A1 based on the New VW Polo platform to compete with Mini will add to Audi's prestige and profit, I think the A3 which competes with the A-class and 1 series is low enough. Let VW, Seat and Skoda compete with Mini.
one more thing being attached to Volkswagen which has lost money and workers this year, and hurts Audi profit. Much like Chyster is hurting Mercedes profits, so overall the group profits are smaller. Just think VW group is now under control of Porsche a company ten years ago was cash poor, pre-boxster days.

— Larry (View Profile)

Posted on 12/21/2006 6:24:21 PM | reply to this comment | Votes: 0   

Anim8or

Actually what will take Audi to the next step of profitability is not the A1, but the new A4, A5 and Q5.

These high volume cars, built on an entirely new platform architecture (not shared by VW), are designed to truly rival the BMW 3 Series by employing new engine placement (further back), rear biased quattro, FSI, Valvetronic, and S-Tronic. All these elements help the A4/A5 either match, or improve upon what has been traditionally attributed to BMW (handling, power, balance of sport and comfort).

Also, note that Audi/VW are currently being restructured. Audi will oversee Bentley, Lamborghini and Bugatti while VW will oversee Seat.

— Anim8or (View Profile)

Posted on 12/21/2006 9:02:30 PM | | Votes: 0   

S4cabriofoxone

And Skoda.

— S4cabriofoxone (View Profile)

Posted on 12/22/2006 12:23:49 AM | | Votes: 0   

Lexus


This is definitely not good news for BMW at all, because they are so use to be on top of Audi, so has it fans. But hey..! you can't be on top forever, it nice to see some change.

Lexus

— Lexus (View Profile)

Posted on 12/21/2006 6:43:30 PM | reply to this comment | Votes: 0   

S4cabriofoxone

If Porsche ends up buying out the VW Group (or Audi Group), they could teach them a thing or two about profitability- bringing their profit margins up even further.

— S4cabriofoxone (View Profile)

Posted on 12/21/2006 6:52:27 PM | reply to this comment | Votes: -1   

chewy

Too bad Porsche is laying off its workers that build the Boxster in Finland. I hope that Porsche only gets 27.4% that it has now.

— chewy (View Profile)

Posted on 12/21/2006 7:03:41 PM | | Votes: -1   

NARunner

either way, more than 20% means they have "significant influence" over the company, and the way they have been increasing their ownership over the last 5 years, I wouldn't be surprised if they end up owning 50% or more of VW, which would officially make them owners.

— NARunner (View Profile)

Posted on 12/21/2006 11:36:52 PM | | Votes: -2   

S4cabriofoxone

Why wouldn't you want Porsche to have a controlling interest? They're clearly an ingenious company and they make some of the world's best cars- arguably, 911 is THE best car in the world. It's an every-rich-man's car, and comes in dozens of configurations with dozens of options.

— S4cabriofoxone (View Profile)

Posted on 12/22/2006 12:25:04 AM | | Votes: -2   

chewy

Because Porsche might feel scared and try their best to make cars like the RS6, Bentley line of vehicles and others be "eliminated" or made less threatening. But I am not sure if this is true, but so far Porsche hasn't said anything that tells me otherwise.

— chewy (View Profile)

Posted on 12/22/2006 3:30:29 PM | | Votes: 2   

SixxFive

Chewy - don't shed a sarcastic tear for Porsche - they happen to be having their tenth year of record income and profits AND....including development costs and plant expansion at Leipzig for the Panamera and additional new job placements, the 27.4% investment in to VW, Porsche still has +/- $3 Billion dollars in the bank. From a business point of view it's amazing/admirable that a small & independent sports car maker, selling not even (but close to) 100,000 cars a year has the ability to aquire such a significant controlling interest in such a giant auto group VW/Audi.

— SixxFive (View Profile)

Posted on 12/21/2006 7:53:14 PM | reply to this comment | Votes: 1   

chewy

No, I was telling the truth. I will post it up.

— chewy (View Profile)

Posted on 12/21/2006 8:14:56 PM | | Votes: -2   

MunichRob

There comes a time in everyones life where they will most likey end up taking care of their parents like they did them. With Audi behaving so well you never know, the future might have Audi playing the parenting role, expecting only so much out of VW...

— MunichRob (View Profile)

Posted on 12/21/2006 8:57:48 PM | reply to this comment | Votes: -1   

chewy

Winterkorn will take care of VW. And here is the Porsche employee layoff article I promised.

http://www.autospies.com/news/Porsche-Boxster-and-Cayman-Producer-Reduces-Workforce-by-222-10968

— chewy (View Profile)

Posted on 12/21/2006 9:39:59 PM | | Votes: -2   

AmazingBimmer

Which idiot writes this?. i am sooo sick of this audi self praising.. and all lies.

— AmazingBimmer (View Profile)

Posted on 12/21/2006 11:24:42 PM | reply to this comment | Votes: -8   

Larry

one more thing, even through Audi has a solid business plan, Volkswagen a company that use to have more market share than Toyota, is now way behind Toyota its main competiton for value type products.

— Larry (View Profile)

Posted on 12/22/2006 12:29:01 AM | reply to this comment | Votes: 0   

MunichRob

Yes 001 'S4' is right...You need to get 'AmazingBimmer' off the site, I'm a Bimmer fan & I don't like him, but I liked 'BMW530i' despite his occasional outbursts.

— MunichRob (View Profile)

Posted on 12/22/2006 12:39:38 AM | reply to this comment | Votes: 1   

JUGNU

The biggest threat to BMW is MB and Lexus.Not Audi.
Audi first try to settle down in US,then think about all this Challenge to the big players.

JUGNU

— JUGNU (View Profile)

Posted on 12/22/2006 5:03:53 AM | reply to this comment | Votes: 0   

S4cabriofoxone

Wow, that is pure ignorance. Horrible.

Lexus is miniscule compared to Audi. They have such a long way to go. Audi could quite possibly overtake Mercedes (or BMW, whichever is #2 at the time) as the #2 luxury automaker in the next decade, what with their product push and all. It's only a matter of time.

— S4cabriofoxone (View Profile)

Posted on 12/22/2006 12:30:54 PM | | Votes: -2   

quattro47

its ridiculus to think just because audi hasn't cracked the ignorant US market that the brand is any less than BMW or MB(i won't include Luxury EXport to the United States as they don't sell globally) this just in..other people in the world know about cars too, and they buy A LOT of audi's..now, i do like audi's but i like all german cars..in fact i love my 1986 M6..but to all you audi haters saying they don't have good products, i bet none of you would turn down my S6..amazing car..sure its not as fast as the merc or bimmer, but its very capable and the technology is great, and this is where audi is headed..please have the RS6 ready soon..all you haters have to take a step back and realize BMW, MB, and audi all make great cars..people buy german cars not for the cupholders or if it can park itself, but to be able to connect with the road like no other and to drive..they are driver cars, and any resonable driver can find an audi, BMW or MB they love..personally i like them all, and would love to have an M5 and a E63 AMG tgo go with my S6..

— quattro47 (View Profile)

Posted on 12/26/2006 2:19:13 AM | | Votes: 1   

CPILLAR

I'll believe it when I see it.

First, Audi said they would surpass BMW in sales by 2015. Now I see 2020 as a date that is being thrown around.

The funny this is that peiople seem to assume that BMW will stand still : they will not broaden the product line or increase sales from current levels. BMW has sold 1.245 million cars to November. They should probably sell around 115000 cars in Dec, bringing their total to 1.36 million cars for the year. and Audi is targeting 1.4 million cars BY 2015..BMW is practically there now.....

Never follow?

— CPILLAR (View Profile)

Posted on 12/22/2006 8:56:41 AM | reply to this comment | Votes: 2   

lewissalem

I feel that Audi's brand perception will increase as more product shows up and people start to realize how nice they are. The addition of the mid-sized crossover Q5 will boost their brand image in the eyes of suburbia. Hopefully they can get those to market as soon as possible.

I love Audi products, however, I feel that they are late to the market with such products as the Q7 and A5. Lack of a coupe with a back seat could possibly drive a buyer to the 3 series coupe or CLK. I know, the A5 is due out soon, but as I said, a little late to the party.

— lewissalem (View Profile)

Posted on 12/22/2006 9:52:29 AM | reply to this comment | Votes: 3   

chewy

Audi could be considered late to the market with the Q7 but coupes have not increased in popularity dramatically, they are just addiing models that they haven't had earlier. Supplementary models to the required ones.

— chewy (View Profile)

Posted on 12/22/2006 7:20:16 PM | | Votes: 0   

S4cabriofoxone

Why do any of you care?

I don't think a single one of you has stock in either of these car companies.

I, however, do have some stock in Audi and it will make me just a bit richer.

— S4cabriofoxone (View Profile)

Posted on 12/24/2006 3:31:24 PM | reply to this comment | Votes: 0   

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