“The introduction of brand group management means that Audi plays an even more important role in the Volkswagen Group.”

Investments in the billions, an operating return on sales of more than 11 percent, cooperations in China: Jürgen Rittersberger, Member of the Board of Management of AUDI AG, Finance and Legal Affairs, talks about how Audi is shaping the future.

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Jürgen Rittersberger, Member of the Board of Management of AUDI AG, Finance and Legal Affairs
Jürgen Rittersberger, Member of the Board of Management of AUDI AG, Finance and Legal Affairs

You have been a Member of the Board of Management of AUDI AG since April 1, 2021, and are responsible for Finance and Legal Affairs. What conclusions would you draw after a year?

 

This was a very exciting year for me: my move to Ingolstadt, a new environment, a completely new team and major challenges straight away. The semiconductor crisis shaped my work from the very first day in Ingolstadt and made it very challenging to steer the company financially. We had to halt production several times and were unable to fully meet the high demand of our customers. But we countered this successfully. We also launched many key projects that, among other things, targeted an increase in our profitability, and these projects will lay the foundation for our financial success in the future. My team has achieved great things in this respect and proved how passionate it is about the Audi brand.

Audi wants to achieve an operating return on sales of more than 11 percent from 2030. Which investments are required for this?

 

We have taken on a considerable challenge with the “Vorsprung 2030” strategy. An innovative and attractive product portfolio is the backbone of sales and profitability targets. That’s why we have now once more increased our investments in the investment planning approved by the Supervisory Board at the end of the year. The Audi Group is planning research and development activities and capex amounting to about EUR 37 billion in total by 2026. As much as EUR 18 billion of this is earmarked for electrification and hybridization. Our priority is to further expand our electric portfolio so that we can offer electric models in all core segments in 2027. A percentage will also be set aside for investment in the joint venture for local electric vehicle production with FAW-Volkswagen in China.

You talk about major investments in the coming years. How do you intend to manage these investments?

 

We will leverage this in two ways: Firstly, we will focus on the profitability of current and future products, continue to optimize our fixed costs and therefore increase the long-term business performance. Secondly, we will exploit synergies in the Group wherever possible and meaningful through shared electronics and drive platforms as well as joint software development with CARIAD.

ESG is an important pillar of the strategy “Vorsprung 2030.” What does that mean for Audi? 

 

I am convinced that economic success and sustainable entrepreneurship are two sides of the same coin. As a company, we bear special responsibility for our environment and society. And we also have to embody this in all products and processes. Our ESG performance serves as proof of the future viability of Audi – in terms of legal compliance, a fundamental shift in customer behavior and financial assessment. It is for this reason that we have firmly anchored ESG criteria in our “Vorsprung 2030” strategy. But there is no blueprint; every company has to find its own path. And that’s what we are doing. For us, ESG goes beyond just measures for reducing CO₂. We have always taken a holistic view of this in the company. We are introducing an ESG management system to reinforce this in our processes. ESG is to play a role in all corporate decisions made by Audi as well as in its products and services. We will also have our ESG performance rated by an independent rating agency.

Audi manages the Premium brand group with Lamborghini, Bentley and Ducati. What advantages do you see in the new brand group management?

 

We have established a new management model with the newly formed Premium brand group. This means that Audi plays an even more important role in the Volkswagen Group. In many areas this gives us the opportunity to accelerate decisions by making them directly and conclusively at brand group level. This makes us more efficient. We can therefore make optimum use of synergies above all in the areas of electronics and platforms. At the same time, brand group management will also allow us to increase transparency by reporting selected key performance indicators as well as strategic goals of the Audi, Lamborghini, Bentley and Ducati brands externally.

New digital business models will become increasingly important in the future for the automotive industry. How far is Audi in this area and what will change as a result for your area of responsibility?

 

We can see a clear shift of profit pools toward digitalization, primarily with the introduction of automated driving in the second half of the decade. The car of the future will become a digital device. We have to utilize this potential by accompanying our customers in the future throughout the entire life cycle and keeping the vehicle up to date at all times, for example by means of software updates. We know that we have some way to go still in this respect. But we have laid the foundations, primarily with the pooling of our software expertise at CARIAD.

Strategy "Vorsprung 2030" – How Audi is shaping the future

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Strategy "Vorsprung 2030" – How Audi is shaping the future

“Vorsprung durch Technik” for the electric era

 

The electric mobility offensive of the Four Rings comes at just the right time. Climate-friendly mobility is becoming increasingly important. As of 2027, the company will offer electric models in all core segments. This range of electric cars will stand out from the competition thanks to its distinctive Audi DNA and “Vorsprung durch Technik” in certain areas. Design, sportiness, driving comfort and quality will all make a difference. In addition, Audi will demonstrate its strengths in workmanship, color & trim and acoustics.

 

A clear plan for the last and, at the same time, best combustion-engine vehicle from Audi

 

Audi is accelerating its changeover to electric mobility: As early as 2026, all new models from the Four Rings on the global market will be fully electric. And in 2033, the Four Rings will shut down the production of vehicles with internal combustion engines. One exception could be China, where the company is investigating the possibility of longer production depending on local demand. The last combustion-engine generation comes with a promise: It will be the best that Audi has ever put on the market. This drive strategy was set out clearly at an early stage, thus providing planning certainty and helping to guide future investments in a targeted and efficient manner. For Audi, this technological change goes hand in hand with the biggest transformation process in the company’s history. A particular focus will be on ensuring that the employees affected are able to train and develop successfully.

 

ESG performance as the basis for a better future

 

Audi already has net carbon-neutral1 operations for the production of its vehicles at several sites. Now the company is focusing even more strongly on sustainability throughout the entire product life cycle – from resource extraction and vehicle operation to recycling of the materials used. In the future, ESG (Environmental – Social – Governance) aspects are to play an important role in all the decisions made by Audi, as well as in its products and services. The main ESG criteria are climate protection, the use of finite resources, employee health and safety and the perception of social responsibility. Another consideration is the robustness of Audi’s corporate governance, for example in terms of compliance and risk management. Audi also submits to external evaluation in all these areas and will be given an internationally recognized ESG rating.

 

Holistic ecosystem puts users first and creates meaningful and fascinating experiences

 

Audi wants to make the progressive premium mobility of tomorrow even more attractive. Alongside the vehicle itself, its focus in the future will be on a holistic customer experience and on ways of integrating that experience into the lives of users. With this in mind, Audi is taking a close look at the users’ needs. They expect fascinating and meaningful experiences from Audi, as well as holistic solutions that seamlessly span all areas of their everyday lives. The ecosystem for electric cars – and in the future also for cars that drive automated – plays a central role in the transformation and will be key to customer satisfaction and thus to long-term, personal customer relationships. An elementary component of the ecosystem is charging, which has already been implemented successfully with charging options at home wall boxes, a comprehensive charging infrastructure with charging points throughout Europe and intelligent route planning. When it comes to further expanding the ecosystem, automated driving in particular will be a game changer. It will give rise to a large number of additional use cases that will fundamentally change the way people use their vehicles. The car will become a personal experience device and can be used as an office, a movie theater, a place to relax or as a space for shopping and gaming. The Audi ecosystem consistently focuses on the user and connects the vehicle with a wide range of services that cover all areas of life – both online and offline. This creates a holistic experience that spans all points of contact with the Audi brand and fits seamlessly into users’ lives.

 

Intelligent hardware: In the future, vehicle part will be fully connected and increasingly made of sustainable materials

 

Thanks to intelligent hardware, customers will be able to continually upgrade their cars going forward. This will ensure that Audi models remain attractive throughout their life cycle. To this end, Audi wants to offer its customers parts with an intelligent information system that proactively sends a request for replacement if it detects wear or a defect. The technical basis for this is provided by the vehicles’ connectivity with a sophisticated interplay of algorithms and sensors. In addition, Audi will recycle components to premium standards to strengthen a circular economy. Sustainable materials and resource-conserving production are key elements here. All these measures are also aimed at positively impacting the residual values of the models in the future. At the same time, Audi is thus expanding its range of services in the after-sales sector and aims to generate additional revenue in this profitable business area.

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