Audi Profits Surged 60% In 2011 - Becoming One Of The Most Profitable Car Companies On The Planet

Audi AG (NSU), the world’s second-largest maker of luxury vehicles, is targeting 2012 profit “on par” with last year’s record results as higher sales offset increased spending on new models and factories.

Operating profit surged 60 percent to 5.35 billion euros ($7.14 billion) last year from 3.34 billion euros in 2010, the Volkswagen AG (VOW) brand said today in Ingolstadt, Germany. Revenue rose 24 percent to 44.1 billion euros, boosted by a 37 percent gain in deliveries in China, its largest market.

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uhn2000 - 3/1/2012 11:51:00 AM

+1 Boost

I have to give Audi credit, they have really come up with some great product and are doing all the little things that made BMW and Mercedes great not to mention they have avoided the dilution of their brand.

94geo - 3/1/2012 11:56:02 AM

+5 Boost

Not a fan of the brand, but anyway..."they have avoided the dilution of their brand." When they are selling A1s that start only a few thousond over a Polo, and a cheaper than a Mini...I would personally classify that as dillution.

AlleVier - 3/1/2012 1:42:06 PM

+1 Boost

The A1 is by no means a value proposition for many markets. "Only a few thousand over a Polo" is a lot of money in that segment. More importantly, it is only sold where the brand is strong enough to support it and that is the essence of avoiding dilution.

The greatest risk of dilution Audi faces is from the perceptions created by platform sharing with (and styling similarities to) VW models. If they fail to convince the public that there's enough additional value in the differences between VW and Audi, then they'll fail. So far, they've done a reasonably good job, although the Jetta styling really pushed the envelope.

Most negative opinions about the Audi/VW ties come from enthusiasts-- especially BMW brand loyalists who love the BMW's independence--who think that Audis are gussied-up VWs, but these are the same people who think everybody should love wagons. Besides, those familiar with history know that the Polo/Golf was a rebadged Audi 50.

BMW's independence is appealing, without question, but we're already seeing signs that this may not be able to continue because it puts a strain on profits. We'll see how long they can continue.

94geo - 3/1/2012 1:02:32 PM

+3 Boost

The Mercedes A class goes up agiants the A3, and the FWD BMW will be a 1 series varient also an A3 comp...Which both cost more than the A3, and obviouly much more than the A1. Not sure what the A class's price will be, but if the 1 series is any indicator it will be at least 1-2K higher than the A3s base.