Audi is on a roll. It has passed Mercedes-Benz to become No. 2 in global premium car sales and predicts its earnings before interest and taxes will rise faster than revenue this year. If the new A1 entry-premium car is as successful as early orders indicate, BMW may be bumped from its place as the world's top-selling premium brand -- a goal that Audi plans to reach by 2015. CEO Rupert Stadler says Audi will someday be the world's No. 1 premium brand, but refuses to get caught up in the excitement of it happening ahead of schedule. He says Audi is reaching new heights because of its growing portfolio of successful products, its leadership in the world's largest market and its strengthening position in the U.S. market. Stadler spoke about Audi's recent success and revealed how he plans to keep the momentum moving forward during an interview earlier this month with Automotive News Europe Correspondent Douglas A. Bolduc.
With the way that you are growing it is not out of the question that you will be the No. 1 premium carmaker by the end of this year. Would you agree?
Let's not get ahead of ourselves. We have a long-term target and we are working very hard to achieve that. Maybe we can achieve one or another sub target a little bit earlier but the most important thing is the brand building process -- the recognition of the brand in the market. This has to be done right and it is only done by offering substance. To do this, a lot of money needs to be invested in the right way. This is what we are doing.
If you don't end the year No. 1 in premium sales that's OK, right?
Our target is to become the leading premium brand in the world. It won't happen in 2010. It won't happen in 2011. But it will definitely happen.
Don't you think that becoming No. 1 in sales could happen even faster because of the launch of the new A1?
That is one part of strategic planning. We are the first company in the premium world to really offer a small premium car: something that offers premium in a new way. And we will be successful. I believe in that. The car is pretty nice and pretty good. And it is well received in the market; we feel that from our dealers. They are absolutely happy with that.
What have been the key events that have led to Audi's success over the past year?
I think that we have to be proud of all the new models we've launched during the last 12 months. We are talking about the Audi A1, which will be launched in the summer, the all-new Audi A8, and the A4 with the 2.0-liter TDI engine that produces 119 grams per kilometer of CO2 and the A3 that produces 99g/km. We also have to mention the Audi e-tron concept that we showed in Frankfurt last year. With this high-performance sports car Audi demonstrated that electric drive is not only a dream, it will be the future. By 2020, 3 percent of our car parc could be electric drive. And if we look back to the first four or five months, we achieved new global sales records. We've sold more than 450,000 cars so far, which is an increase of more than 20 percent compared with last year. As markets continue to positively develop, we forecast that we will not only increase our operating profit but will also break through the 1 million-unit barrier for sales to customers.
Audi has been a key contributor to parent Volkswagen AG's success over the past few years especially financially. Is that something you're quite proud of?
Of course, we should be proud. If there is one brilliant daughter within the Volkswagen group it is Audi. We are proud to contribute to such a large group.
Has your decision to push so strongly into China made Audi a stronger competitor against your German rivals?
Sometimes you have to be a pioneer. We were often told that we are behind BMW and Mercedes in the United States. Twenty years ago we started our operations in China and today we enjoy the benefits of that. We are good joint venture partners. The business success we have had proves that we were right (to invest) at that time.
Would you be having this much overall success had you not invested so much China the last 20 years?
In 2009, we delivered nearly 159,000 cars to customers in China. Based on current conditions we estimate that this year we will increase our sales to 200,000 units. So Audi will expand its commitment in international markets. In 2009 we added a new production plant in China. We intend to focus our activities there. When it came to new products, innovative technologies, and sales and marketing we invested during the economic crisis in 2009 when others hit the brakes. We continue to move forward.
I'd also like to mention our Super Bowl ad. That helped improve our image in the United States. We try to focus on all sides of the business and we will continue to do this.
Do you have any tangible evidence that your Super Bowl ad helped improve sales in the United States?
I'm not quite sure if our 30 percent increase in sales is directly related to our Super Bowl ad. The main reason that Audi is improving is because of our pioneering diesel technology. We decided to go with the diesel to the United States. We launched that very successfully with the Q7. With the A3 diesel we are offering the greenest car and cleanest car in the world. So we are quite happy. I would say that our strategy is mainly focused on product. And product pays back.
Don't you think that in order to really be taken seriously in the United States you need to build there?
Just look at how the brand is performing in all the key metrics. We are absolutely on the right track. We have excellent relations with their dealer body. They are very happy about the high quality and reliability of our cars. They are also happy about the design and the appearance of our cars. You can see that based on the more than 30 percent increase in sales in the first five months. We are still hard workers. We will continue to do that in the United States.
This also is not a euro-dollar currency issue in the United States. Even in difficult times with the euro-dollar exchange rate we pushed the quality of our business in the US because we believe in that market.