Key figures for the future

Create transparency, identify value drivers, pursue strategic investments – the Four Rings are implementing the new strategy “consistently Audi” with a strong key-figure system. Jan Michel, Head of Corporate Strategy, and Dietrich Braßler, Head of Finance & Controlling, explain how Audi will use specific key figures to reach its strategic goals and boost the company’s value.

03/19/2020 Copy: Dorothea Joos – Graphics: Strichpunkt Talking Business Reading Time: 4 min

Talking Business – Key Facts

  • Deriving key figures from the new Audi strategy
  • Strategy-oriented system of key figures measures the quality and progress of the strategy’s implementation
  • With its key figures, Audi is creating transparency both internally and externally and boosting the company’s value.

Jan Michel, Head of Corporate Strategy
Jan Michel, Head of Corporate Strategy, worked with his team to devise the new strategy “consistently Audi.” Specific key figures will enable the company to measure the implementation of the strategy in practice.

How is Audi putting the new strategy into practice?
Jan Michel:
We are setting a clear direction for our Audi business model with our vision to “unleash the beauty of sustainable mobility.” Our mission “consequently Audi” uses eight mission fields to describe the WHAT and HOW we are putting our strategy into practice. Points of reference for operationalization are crucial to success. This is why we are gradually defining key figures for the eight mission fields that measure implementation quality and progress.

How does the strategy support corporate management?
Dietrich Braßler:
Management based on key figures enables us to control our current value drivers, identify new ones and deploy our resources in a strategic, long-term manner. In addition to classic financial key figures, we also use strategic figures that we have drawn from the mission fields of “consistently Audi.” However, our system of key figures is not just for internal management purposes. By communicating selected key figures, we also want to make the company’s value transparent to external audiences and increase it over the long term.

Dietrich Braßler, Head of Finance & Controlling
As Head of Finance & Controlling, Dietrich Braßler works with his team to establish important wayposts for the company’s success. With the help of a system of strategic and financial key figures, he creates more transparency both inside and outside the company.

Can you provide specific examples?
Jan Michel:
One of our eight mission fields is “consistently electric.” The new energy vehicle share is the key figure used to reflect target achievement. This indicates how high the share of electric vehicles – in other word, plug-in hybrids and battery electric vehicles – as a percentage of total production volume. Our goal for 2025 is an NEV share of around 40 percent. In the 2019 fiscal year we had reached 3.5 percent. In order to achieve this goal successfully, we have set clear priorities in the company. This is reflected in 11 “consistently” initiatives – one of which has the focus on the technical preparation of a future-proof powertrain portfolio and a competitive, sustainable product portfolio.

Dietrich Braßler: Transparency is important to us. This is why we are also reporting key figures for targets that we have not yet met. At the same time, we want to indicate where the current value drivers at AUDI AG are. For instance, in the 2019 fiscal year we again boosted our deliveries in the SUV and high-performance segment. With these models we are financing investments in future technologies such as electric mobility. This is why production and deliveries in this segment are important key figures for us. We are also electrifying these segments to keep them viable for the future. 

Important key figures in the overview

NEV share 2019: 3.5%

NEV share 2019: 3.5%

Audi wants to take the lead in the transition to e-mobility. By 2025, the company already wants to have around 30 electric models on the market. Based on current market forecasts, plug-in hybrids and all-electric cars are expected to make up around 40 percent of all vehicles produced by 2025. In this way, the company wants to continually increase its share of new energy vehicles (NEV).

Connected vehicle share

Connected vehicle share

Audi uses this strategic key figure to measure the share of connected vehicles. These include Audi models with the Audi connect function. The goal is to achieve a connected vehicle share of 100 percent by 2025.

SUV ratio: 42.6%

SUV ratio: 42.6%

In the 2019 fiscal year, the Audi brand produced 764,230 SUVs, corresponding to a share of 42.6 percent of the total volume. Audi wants to continue to expand this high-margin segment, which is very popular with customers. At the same time, the company is moving consistently toward electrification: In 2019, 7.3 percent of Audi SUVs were already plug-in hybrids or fully electric.

Fleet CO₂ emissions: 131 g/km*

Fleet CO₂ emissions: 131 g/km*

Audi is working intensively on reducing its CO₂ emissions with the goal of meeting the EU fleet targets, which will be considerably tighter as of 2020. As part of the mission field “consistently sustainable,” Audi is going beyond mere compliance with the law and considering CO₂ holistically. In doing so, the company wants to make a contribution to the Volkswagen Group goal of reducing the decarbonization index (DCI) by 30 percent by the year 2025. CO₂ will therefore become an important strategic indicator at the company.

* Provisional internal calculations for 2019 subject to confirmation by the EU

Research and development ratio 2019: 7.9%

Research and development ratio 2019: 7.9%

Audi is consistently pushing forward with future topics such as electric mobility and digitalization. The R&D quota in the 2019 fiscal year additionally reflects the current model initiative. But “consistently Audi” also means setting priorities in research and development and pursuing innovations according to a clear strategy. Audi achieves this, for instance, through synergies in the Volkswagen Group and a customer-oriented, leaner product portfolio. In the medium-term, Audi wants to achieve an R&D quota in the new strategic target corridor of 5 to 6 percent.

Operating return on sales 2019: 8.1%

Operating return on sales 2019: 8.1%

Audi is currently in the midst of a system change to e-mobility and is investing upfront in new drive concepts and models. As a premium manufacturer, the brand wants to achieve premium margins of 9 to 11 percent over the medium term. One important contributing factor is the Audi Transformation Plan (ATP), which had already brought in a cumulative  total of EUR 4.4 billion by the end of 2019. By the time the plan expires in 2022, it is expected to contribute a total of EUR 15 billion. The "Audi.Zukunft” program, which was agreed with the Works Council, is continuing to contribute to profitability targets.

High-performance segment

High-performance segment

The high-performance segment makes an important contribution to Audi Group earnings. The Lamborghini brand delivered 42.7 percent more cars to customers last year. This increase is largely due to the Lamborghini Urus, which accounted for 60 percent of deliveries. Income from the high-performance segment makes an important contribution to financing future technologies such as electric mobility. Audi plans to double deliveries of R and RS models by 2023 in comparison with the reference year 2019. At the same time, the company is also leading the high-performance segment into the future: RS and Lamborghini models will gradually be electrified in the coming years.

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