The Audi Group considers one of its central tasks, over and above simply securing its own long-term competitiveness, to involve conducting its business in a value-oriented future-proof manner that concurs with the aims of its interest groups. Only when combined with profitability can growth meet the premium standards of the Audi Group and thus lead to a long-term rise in the value of the Company.
Qualitative growth and economic stability
With more than 1.57 million vehicles delivered, the Audi brand achieved a new sales record in 2013, despite the difficult market conditions in Europe. In so doing, Audi increased its sales revenue to 49.880 billion euro and achieved an operating profit of 5.030 billion euro. Over the full year 2013 the operational return on sales of 10.1 percent was slightly higher than the strategic target corridor of eight to ten percent.
In its management of the Company, Audi prioritizes effective and efficient structures and processes, a long-term approach to investment management and continuous cost optimization. A high level of self-financing helps to lastingly preserve the Company’s scope to invest and act. In this connection, the objective of fundamentally financing investment from self-generated cash flow is a key pillar of our corporate strategy. The equity ratio reflects a balanced capital structure and is a clear sign of the Company’s high stability.
The Group-wide risk and compliance management systems provide ideal protection against risks for the strategic and operational corporate objectives. The Company management considers it to be of key importance that all decisions are in harmony with current legislation as well as with the Company’s own internal rules and values. In light of this, the Governance, Risk & Compliance area has developed a preventive approach to the concept of compliance in which the analysis of commercial and legal risks is bracketed together. The risk management and control system, based on the internationally recognized standard of the Committee of Sponsoring Organizations of the Treadway Commission (COSO), is of help in identifying, minimizing and if possible avoiding potential risks.
The company is planning to continue this growth in the future. Between now and 2018 it will be investing some 22 billion euro in innovations and new technologies and in expanding its worldwide production infrastructure. In Germany alone, the brand with the four rings will be taking on 1500 new employees and providing vocational training for a further 750 young people in 2014.
Goals geared towards sustainability
At the beginning of each year, members of Audi management reach an agreement on their individual goals with their respective line managers. The basic idea of this goal-setting process is to combine each individual goal to the six corporate goals stipulated in AUDI AG’s Strategy 2020:
- Superior financial strength
- Continuous growth
- Best image and customer structure
- Innovation leader
- Attractive employer worldwide
- Sustainability of products and processes
Audi’s understanding of sustainability means taking economic, ecological and social aspects into account when making decisions, in order to secure the long-term competitiveness of the company and thus fulfil its responsibility as a reliable employer. By deriving individual goals from the corporate strategy, each and every goal will make a contribution to achieving the overall objectives.
Co-determination and social partnerships
As a fair social partner, cooperation between company management and the Works Council plays an important role for Audi.
As a fair social partner, cooperation between company management and the Works Council plays a key role for Audi. In addition to safeguarding jobs, the Works Council pursues the goal of keeping operations economically efficient and future-proof – because only a company that is successful in the long term can provide a permanent guarantee of jobs.
It is in the interests of the workforce that the employees’ elected representatives ensure that current laws and regulations as well as collective and company agreements are heeded. The German Works Constitution Act gives the Works Council the right to co-determination and participation in social, HR and economic affairs.
The Works Council furthermore actively supports training and advancement of members of the workforce. In addition to the Committee for Vocational Training and Concept Development, there is an Ideas Commission at the level of the General Works Council which operates in tandem with the Audi Ideas Program. In 2013, the company implemented around 17,130 improvement proposals, saving 65.6 million euro through the ideas of its employees. In the summer of last year, selective campaign weeks were held on the subjects of sustainability, health protection and industrial safety.
The heart of the Audi strategy is the mission “We delight customers worldwide.” The goals that Audi has set itself in the sphere of customer care are correspondingly ambitious. The customer satisfaction is very important. One example: The “Kundentisch” (Customer Table) is a panel that regularly analyzes specific customer needs and finds solutions to them. The Board Member for Sales and the Chairman of the Board of Management join top managers in serving on this panel.
July 2012 saw the opening of the first Audi City – a new, innovative sales format – right in the heart of London. Customers visiting Audi City can experience and configure Audi models and equipment options in all their diversity thanks to cutting-edge virtual technology, but this is also a venue for dialogue with customers and follows of the brand, as well as for cultural events. At the beginning of 2013, Audi City Beijing followed and in February of this year Audi City Berlin. Other locations in major international cities are set to follow.
In addition to demanding a high level of performance and competitiveness from its suppliers, the Audi Group expects them to adhere to strict sustainability standards. One of the stated goals of the procurement policy of AUDI AG is to fulfill the brand promise “Vorsprung durch Technik” through its selection of suitable suppliers. In order to make optimum use of synergy potential, Audi chooses suitable business partners in cooperation with the Volkswagen Group.
Since 2006, the Volkswagen Group’s procurement management policy has been based on the concept of “sustainability in supplier relations”, which binds suppliers into requirements such as the adoption of an environmental management system and the avoidance of environmental and health hazards. Suppliers are also expected to ensure the sustainability of their own suppliers. The concept is aligned with principles laid down in the UN Global Compact, the OECD Guidelines for Multinational Enterprises as well as the relevant conventions of the International Labour Organization.
Together with other companies in the sector and the environmental organization IUCN (International Union for Conservation of Nature), Audi is also active in the Aluminium Stewardship Initiative (ASI). The objective of this initiative is to develop a global standard for sustainable aluminum by late 2014. Environmental and social criteria valid for all stages of raw material extraction, production and processing are to be defined here.