Audi – the premium brand
Our overriding strategic goal is to develop Audi into the world’s leading brand in the premium automobile segment. This vision is at the core of our Strategy 2020, which was first unveiled in 2010. In the years that followed, we further substantiated and fine-tuned the topics under the roof of our strategy house to reflect changing economic, ecological and social requirements. The strategic cornerstones remain unchanged and have long-term, sustainable corporate success as their objective.
We delight customers worldwide
Customer delight remains at the heart of our Strategy 2020. Our brand essence “Vorsprung durch Technik” comprises the values sportiness, progressiveness and sophistication. These are embodied in particular by our technologically advanced and innovative products, which are also noted for their attractive design, high-caliber materials and build quality.
In order to delight our customers worldwide, we have defined four strategic areas of activity for the Audi brand that are continually reviewed, substantiated and refined:
Areas of action
In order to continue delivering our brand essence “Vorsprung durch Technik” in the future, we aim to play a pivotal role in defining the future shape of mobility through innovative auto-mobiles and intelligent mobility solutions. Critical success factors include activities such as closely monitoring megatrends and global developments – for example, urbanization and digitization – as well as identifying the direction of future customer expectations.
At Audi, living “Vorsprung durch Technik” also means meeting increasing ecological demands. In an effort to reconcile driving enjoyment, sportiness and comfort with fuel economy, we pursue a multi-stage concept that ranges from optimizing our TDI and TFSI engines to developing alternative drive concepts. Audi groups together all activities that involve electric driving under the umbrella term e tron. Vehicles with plug-in hybrid technology have an important role to play here. They combine long-distance capability with zero local emissions and sophisticated handling characteristics. We are also systematically advancing the development of all-electric drive systems and of fuel cell technology.
The connectivity and digitization of our society are becoming increasingly significant. The optional Audi connect services link the driver to the car, the Internet, the infrastructure and other vehicles. At the start of 2014, Audi became the only premium automotive manufacturer to join the Google Open Automotive Alliance (OAA). This partnership pursues the goal of integrating the Android platform and its apps into the car’s operating system, under the name Google Android Auto. The functions of iOS devices will also be available in the vehicle via Apple CarPlay. The Audi Multi Media Interface (MMI) of the future will thus integrate key functions of both smartphone platforms. The new Audi Q7 is already one of the first auto-mobiles in the world to offer both Google Android Auto and Apple CarPlay smartphone integration.
The ability of vehicles to connect with their environment and with each other is a major prerequisite for piloted driving – a new evolutionary stage that goes well beyond the existing functions of assistance systems. Piloted driving means that in certain situations the driver is relieved of the task of driving altogether. For example, this can reduce the burden on the driver in traffic congestion, thus increasing safety as 90 percent of all traffic accidents are caused by human error. Audi impressively demonstrated its expertise in piloted driving at the limits with the Audi RS 7 piloted driving concept, which took to the racetrack at the German Touring Car Masters (DTM) season finale. Showcasing this technology, the vehicle lapped the Hockenheim Grand Prix circuit at racing speeds, entirely without a driver.
In addition, the Audi A7 piloted driving concept successfully completed the first piloted long-distance run at the start of 2015. On the tour covering approximately 900 kilometers from Silicon Valley to the Consumer Electronics Show (CES) in Las Vegas, journalists were given the opportunity to witness piloted driving live from the driver’s seat. The concept vehicle passed the long-distance test featuring real-life, everyday driving conditions with flying colors.
Audi is tapping new areas of innovation hand in hand with the growing trend towards urbanization. We are pushing the development of intelligent mobility solutions in the shape of Audi mobility. We have already launched various innovative premium car-sharing concepts in major cities with dense traffic.
Many different surveys confirm that design is the main reason why people choose a particular car. We are methodically refining our unmistakable design idiom. One particular priority is to differentiate more between the individual model series. We will also make our designs reflect a vehicle’s technologies more overtly – both inside and out – in future model generations.
Taking lightweight construction solutions to the next level is another key priority in our technology activities. We are implementing the principle of an intelligent mix of materials, in other words the use of the right material in the right place, and of integrating functions and systems into new vehicle architectures. The goal is to systematically reduce vehicle weights across the entire product range.
In the domain of all-wheel drive, Audi has been among the technology leaders in automotive manufacturing for several decades with its quattro drive. We are steadily expanding our expertise, and the past fiscal year saw us bring quattro drive to market in the small compact car segment with the arrival of the new S1 models. The Audi brand can therefore now supply its customers with quattro drive in every car line.
We want to delight our customers worldwide with experiences that embody the spirit of the Audi brand. Audi City digital cyberstores now offer our customers in London, Beijing and Berlin the opportunity to configure their ideal Audi vehicle virtually, drawing on the entire range of colors and trim available, and experience it in full size. In 2014, we refined the technologies that we use in the Audi City with a view to gradually rolling them out at our dealerships worldwide. Individual modules – such as multitouch tables and the exclusive Customer Private Lounge that enables us to conduct sales consultations in an exclusive setting – can now be integrated flexibly into dealer premises, as required. The new Audi virtual reality glasses, which were first unveiled at the end of 2014, create an encounter of a special kind by allowing the wearer to experience the vehicle in three dimensions. The Audi brand also delivers memorable, emotion-packed experiences at a variety of national and international events. These include the Audi ultra Cup, a separate regatta held during the Kieler Woche – one of the world’s major yachting events.
Various driving and safety training courses at the new Audi driving experience center in Neuburg give our customers access to unique driving experiences. Since May 2014, we have held a wide range of customer events here on a 30,000 square meter dynamics area, a handling course and an off-road area.
Our customers can also savor special, memorable moments when collecting their new car at the Audi Forums in Ingolstadt and Neckarsulm. Customers have the option of booking a customer relationship manager to accompany them. Along with interesting background information on the history of the Audi brand, the customer receives a personal tour of the plant, during which they witness first hand how much precision and care goes into building cars of the Audi brand.
Our steady volume growth, a progressively broader product portfolio, growing internationalization and the development of new technologies and business areas are key challenges for the Audi Group. It is vitally important for us to continue refining our structures and processes if we are to prepare the ground for high-quality, profitable growth in the future as well. When making our product and investment decisions, we always consider how to deliver maximum benefit to the customer. Our employees’ expertise and passion for the products of the Audi brand are equally a major success factor.
“We live responsibility” reflects how the three pillars of sustainability – society, ecology and economics – underpin the Audi strategy. They each carry equal weight in our corporate decisions. Particular emphasis was placed on product-related topics over the past year, and specifically on how our vehicles can meet increasingly tough CO2 emission limits.
The “Corporate Responsibility” area brings all sustainability-related activities together under one roof and helps the companies of the Audi Group to put into action the five defined core themes Product, Environment, Employees, Society and Operations. The Audi Corporate Responsibility Report sheds light on the goals and measures designed to promote sustainability. We updated the sustainability data in 2014 and submitted a progress report to the UN Global Compact, the world’s largest corporate social responsibility initiative. We also published our first Declaration of Conformity with the German Sustainability Code last year. The next full sustainability report will be published in time for the Annual General Meeting of AUDI AG in May 2015.
In September 2014, the Board of Management of AUDI AG defined the term “ultra” as a leitmotif of pioneering sustainability issues. The “ultra” badge has consequently undergone a steady evolution: Originally used to denote Audi lightweight construction, the ultra models also incorporated the dimension of efficient automotive technologies starting in 2013. In the future, it will be used to signify our ambition to comprehensively align the brand essence “Vorsprung durch Technik” with sustainability. Here too, we work on the premise that all three pillars of sustainability must be taken into consideration.
Together with our stakeholders, we reviewed the relevance of key aspects of sustainability in 2014. The international locations in Belgium, Italy, Mexico and Hungary also participated in this process.
In addition, in partnership with the Fresenius University of Applied Sciences for Management, Business and Media, Munich, we carried out the project “Materiality analysis of international sustainability aspects for AUDI AG” in 2014. The goal was to establish how relevant the sustainability aspects defined by the Global Reporting Initiative are for a company in the automotive industry, and specifically for Audi, in the countries Belgium, Italy, Hungary and Mexico.
We mapped the results of the external and internal analyses in a matrix, vividly expressing the relevance for Audi (on the x-axis) and its stakeholders (on the y-axis) in relation to each other.
The Audi brand has clear objectives on different areas:
Overview of goals
A stable long-term profit performance reflects the financial strength of a company. In our case, growth only meets the premium standards of the Audi brand if it is simultaneously profitable. According to our responsible, value-oriented corporate management approach, qualitative growth is a priority strategic goal. It can only be achieved through effective structures and processes, systematic investment management and the ongoing optimization of costs. Our high level of self-financing gives us extensive scope to invest and act. It is especially important to us to finance investment from self-generated cash flow. Our Company’s high profitability is furthermore reflected in our key return ratios.
For years, the Audi Group has been one of the automotive industry’s most profitable manufacturers worldwide.
With a total of 1,741,129 (1,575,480) cars delivered, the Audi brand advanced to a new record level in the past fiscal year. High demand for the vehicles of our new A3 family and healthy growth in Western Europe, Asia and North America proved especially beneficial. We achieved the volume target of 1.5 million cars delivered – originally set for 2015 – in the 2013 fiscal year. Deliveries of 1,575,480 Audi vehicles in that year therefore meant we were a whole two years ahead of target. By consistently pursuing our product initiative and targeting higher market shares in the various sales regions, we are heading towards the next milestone of over 2 million Audi vehicles delivered worldwide. To that end, we are continually optimizing and expanding the international dealer and service network in important growth markets so as to establish broad and solid foundations for our business model. At the same time, we are expanding our worldwide production structures.
A strong brand and a positive image are key success factors for a premium car manufacturer. It is vitally important to have a corresponding customer mix – for example in terms of average age, values and price acceptance – in addition to high image ratings. We aim to keep improving these factors and steadily enhance our high-quality, innovative product portfolio in order to delight customers and tie them emotionally to the Audi brand.
An array of national and international awards has already confirmed the appeal and popularity of the brand with the Four Rings.
Our ambition is to lead the way in both design and technology, and we offer our customers sporty, high quality and innovative products as well as intelligent mobility solutions. Our overriding objective is to align the best technologies with the expectations of our customers.
The past fiscal year again saw us step up our activities to bring innovations to production maturity. As part of our goal to delight customers, our priority areas are design, sophisticated interiors and exteriors, efficient conventional and electrified drive systems, lightweight construction, Audi connect and piloted driving.
The successful Audi innovation strategy is again reflected in a large number of patent applications.
2014 brought us another string of awards for our advanced technologies and progressive design.
In order to become the leading premium automobile brand worldwide, the Audi Group also needs to be an attractive employer worldwide. Only then will our Company be able to attract the best and most able employees with the most expertise and commitment. A varied and challenging work environment and good development prospects, coupled with job security and commensurate, attractive pay, are all major factors. We regularly conduct in-house surveys in order to gauge the satisfaction of our workforce and to ensure that we keep them satisfied in the future as well.
Especially in light of our growing internationalization, we want to be ranked among the top employers particularly in those regions where we have our main locations. Various national and international rankings have already regularly confirmed the Audi Group’s attractiveness as an employer.
Through the corporate objective “Sustainability of products and processes,” we aim to reconcile social and economic benefits in all core processes, use resources sparingly, be mindful of the future in our actions, and secure the long-term competitiveness of the Company. Taking this corporate objective as a starting point, the individual divisions build their sustainability goals into the strategies and processes for their specific area. The focus throughout is on reducing CO2 emissions from both our products themselves and production processes. In the period under review, the sustainability goal was also operationalized with regard to employees and society, for example in the form of the newly drafted Audi leadership principles or in the global principles for social involvement at Audi Group locations. The updated sustainability goals and measures will be published in the Audi Corporate Responsibility Report in May 2015.