AUDI AG

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Corporate strategy

 

Vision: “Audi – the premium brand”

In its Strategy 2020, which was first unveiled in 2010, the Audi Group set itself the goal of becoming the leading brand worldwide in the premium car segment. Since the strategy’s launch, it has undergone continuous refinement. The cornerstones and areas of action retain their validity. The strategy house was therefore further substantiated again in the past fiscal year to bring it up to date with changing economic, ecological and social requirements.

We incorporated our fundamental principle of acting sustainably and responsibly by firmly anchoring the goal “Sustainability of products and processes” in our strategy. We also reasserted the “We define innovation” area of action through our declared goal to be “Leaders in innovation.”

The Audi brand’s strategy 2020

 

Mission: “We delight customers worldwide”

“Vorsprung durch Technik” comprises the brand values sportiness, progressiveness and sophistication. This is reflected in our products, which are noted first and foremost for their modern design, technological innovations and high material and build quality. In addition, we want to evoke customer delight worldwide, in all its facets. The mission to delight customers therefore remains at the heart of our Strategy 2020.

To that end, the Audi brand has defined the following four areas of action that are being continually reassessed, refined and refocused.

  • We define innovation
  • We create experiences
  • We live responsibility
  • We shape Audi

We define innovation

In order to continue delivering our brand essence “Vorsprung durch Technik” in the future, we will offer our customers not just sporty, high-quality, innovative vehicles, but also comprehensive mobility solutions. We develop important key technologies for alternative drive systems, lightweight construction and connectivity to production maturity. The innovative character of the brand with the four rings is also highlighted by its modern and unmistakable design idiom.

On top of this, for over 30 years Audi has been one of the technologically leading car manufacturers in all-wheel drive with its quattro drive concepts, and has played a decisive role in pioneering its development.

All activities related to electric driving are promoted under Audi e-tron. Our medium-term goal is to bring a car with plug-in hybrid drive onto the market in every core car line. The intention is to make long-distance capability, zero local emissions, excellent driving dynamics and emotional appeal a reality, and to generate enthusiasm for electric driving. In addition, we are working systematically on refining all-electric drive systems.

Lightweight technology, too, is especially important at Audi. It is now 20 years ago that we first unveiled the Audi Space Frame (ASF) at the International Motor Show (IAA) in Frankfurt am Main, and we have been among the leaders in this field ever since. We have consistently refined lightweight technologies in an effort to make vehicles lighter. An intelligent mix of materials and the integration of functions and systems into trendsetting vehicle architectures bring us closer to our goal of sustainably reducing weight across the entire product range. In addition, we plan to position flagship lightweight models in every vehicle segment in the future. A low vehicle weight is also among the key fundamentals for electrification of the drive system in order to compensate for the extra weight of the battery and reduce the amount of energy required.

The growing connectivity and digitization of our society is becoming increasingly significant. Audi uses the term Audi connect to denote all functions that connect the driver with the Internet, the car and the world around him or her. Our customers benefit from attractive, innovative Internet and smartphone applications that are integrated into the car as user-friendly solutions.
In addition, Audi is working intensively to refine car-to-X technologies that in the future will enable the transfer of data from one car to another, as well as direct communication with the infrastructure, for example with traffic signals. Audi is also a prime mover in the field of driver assistance systems and is working hard to advance the principle of piloted driving. This means that vehicle systems take charge of driving the car for a limited period, offering the prospect of even more convenient driving – such as piloted driving in traffic jams and when parking.

We create experiences

One means of delighting our customers is to create positive customer experiences, for example by offering innovative sales formats such as Audi City. This cyberstore principle for major cities – currently available to customers in London, Beijing and Berlin – gives customers the opportunity to experience our steadily growing model range virtually, complete with the full array of colors and equipment.

Unique events put on by the Audi brand in German cities – such as the annual Audi Classic Open Air Festival in Berlin and exciting yacht races at the Kieler Woche regatta – provide unforgettable experiences and emotion-packed moments.

Audi driving experience, the program for driving and safety training courses, is a way of getting to know the Audi brand’s products first hand. A new Audi driving experience center is currently being constructed on a 47-hectare site in Neuburg an der Donau.

Another way in which our customers can experience Audi emotionally is to pick up their new car in person from the Audi Forum in Ingolstadt or Neckarsulm. If the buyer so chooses, he or she can be accompanied by a customer relationship manager throughout the whole day, gain insight into the historical development of the brand with the four rings, and discovers on an individual tour of the plant the sheer precision and care that go into building the cars of the Audi brand.

We live responsibility

In the area of action “We live responsibility,” Audi has strategically grouped together all activities concerned with sustainability. “We live responsibility” rests on the three pillars of sustainability: society, ecology and economy. To implement these in practice, we have focused on the five core themes “Product,” “Environment,” “Employees,” “Society” and “Operations.” For each of these core themes, the Audi Group has defined goals, projects and measures that were published for the first time in 2013 in the Audi Corporate Responsibility Report. The goals of the sustainability strategy are derived both from internal requirements and from the expectations of the various stakeholders.

The relevance of key sustainability topics is summarized in what is known as the materiality matrix and regularly updated with new findings. For example, in 2013 a total of 1,500 employees in Germany and abroad were asked to evaluate the significance of sustainability topics in the Audi Group. To supplement employee input, the Company regularly invites representatives of various stakeholders to participate in discussion forums as a way of specifically promoting the dialogue about responsibility and sustainability. The materiality analysis reveals that product-related topics are viewed as especially relevant for sustainability both within the Company and by external stakeholders. The stakeholders attribute a similar level of importance to the economic stability of the Company.

To gauge its sustainability performance, Audi took part as in previous years in the renowned oekom research corporate rating and achieved “Corporate Responsibility Prime Status” for its above-average commitment. The information gleaned from the rating is channeled into guidelines and activities in order to strengthen our corporate responsibility.

Materiality matrix

We shape Audi

The challenges presented by continuous volume growth, a steadily expanding product range, growing internationalization and the development of new technologies and business areas can only be tackled by drawing on the expertise, passion and innovativeness of all employees, and on an organization specifically primed to handle them. Structures and processes are therefore constantly being refined and adjusted. Product and investment decisions are made specifically with an eye to delivering maximum customer benefit.

 

Goals

Superior financial strength

A sustained and continuous profit performance is the indicator of a company’s financial strength. Within the scope of our value-oriented, responsible corporate management approach, growth only meets the premium standards of Audi if it is si¬multaneously profitable. In other words, qualitative growth is our priority. Effective structures and processes, systematic investment management and the ongoing optimization of costs are of prime importance.

Thanks to our high level of self-financing, we have consider¬able scope to invest and act. Fundamentally covering investment from self-generated cash flow remains a key pillar of our corporate strategy. In addition, the key rate of return ratios reflect our Company’s high profitability and provide evidence that the Audi Group is among the most successful automotive manufacturers in the world.

Continuous growth

With a total of 1,575,480 (1,455,123) cars delivered, the Audi brand did not merely establish a new deliveries record in the 2013 fiscal year, but also achieved the volume target of delivering 1.5 million vehicles – originally set for 2015 – two years earlier than planned. The major drivers of demand included in particular our attractive premium compact vehicles in the new A3 family, as well as the Q3 and Q5 SUV models. We intend to achieve our growth target of delivering more than 2.0 million vehicles by continuing the product initiative and growing our market shares in a large number of sales markets. The Audi Group is consequently also increasing the number of its dealer and service outlets worldwide. Furthermore, we are broadening the basis for our business model through the continued expansion of our international production network – for example in Hungary, Mexico, Brazil and China.

Top image position and customer mix

For a premium manufacturer, a strong brand and a positive image pave the way for lasting corporate success. In order to safeguard our position both now and in the future, image ratings that are better than the competition and a corresponding customer mix – for instance in terms of average age, values and price acceptance – are vitally important. Our goal is to keep improving our image position and our attractive product range. We aim to delight customers in all age and social brackets with our sporty, high-quality, innovative vehicles, and establish an emotional bond to the Audi brand. A large number of national and international awards and analyses confirm the positive image and public enthusiasm for the brand with the four rings.

Leaders in innovations

The Audi brand lays claim to the status of design and technology leader. We have set ourselves the task of offering our customers sporty, high-quality and innovative vehicles, along with pioneering mobility solutions. Aligning advanced technology with customer expectations is our overriding objective.

Audi adopts an integrated view of innovations along the entire value chain. In 2013, it thus stepped up activities designed to generate innovations across the divisions and bring them to production maturity. All innovations have a focus within one of the four core technology areas – forward-looking vehicle architectures, highly efficient vehicles, integral mobility technologies and unmistakable product experience. These core topics are firmly positioned within the research and development strategy, and are followed up and managed on the basis of individual projects.

The successful Audi innovation strategy is also reflected in the significant increase in patent first filings. In 2013, these were up 40 percent on the previous year.

Reflecting our ambition to be leaders in innovation, 2013 saw us again invest substantial amounts in highly complex office and test-bench buildings at our development locations. Beginning in 2014, for example, we plan to test innovative technologies at our new Motorsport Center in Neuburg an der Donau in preparation for adopting them in series production; these include Audi lighting technology, lightweight construction, electrification as well as our TDI and TFSI engine concepts.

In addition, Audi technologies and its design received multiple awards in 2013.

Attractive employer worldwide

In order to become the leading premium brand worldwide, the Audi Group is reliant on the expertise and commitment of the best and most highly qualified employees. It is important to us to offer our workforce an exciting and challenging working environment with wide-ranging opportunities for development, commensurate and attractive pay, and a high level of job security. We regularly conduct in-house surveys among our employees in order to gauge their sentiment and maintain satisfaction levels.

In view of our continuing international expansion and global presence, it is fundamentally important for the Audi Group to be perceived as an attractive employer worldwide. In regions where we have major locations and branches, we want to continue to count among the top employers in the future too. We use national and international ratings to assess our attractiveness as an employer all over the world.

Sustainability of products and processes

Early in 2013, Strategy 2020 was expanded to include the corporate goal “Sustainability of products and processes.” The ambition to make all products and processes sustainable along the entire value chain reflects Audi’s perception of its own entrepreneurial actions. We aim to further reduce CO2 emissions in our products’ phase of use, and use natural resources sparingly during our production processes.