Audi's Race With BMW To Be Number One, Begins To Eat Away At Profits

Audi's race to catch up with German rival BMW is taking its toll on its profit margin.

Audi's operating margin slipped to 9.7 percent from 10.1 percent a year earlier, the carmaker said in a statement today, while reaffirming its 8 percent to 10 percent target range.

"Despite ongoing high investment, we are systematically pursuing our ambitious profitability targets," finance chief Axel Strotbek said in the statement.

Audi said that its first-quarter operating profit rose 8.2 percent to 1.42 billion euros ($1.58 billion), fuelled by growing demand for the A6 sedan and Q3 SUV.

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TheSteve - 5/4/2015 10:05:22 AM

0 Boost

BMW is a frightfully impressive company in terms of their leadership and financial strength. They've been consistently profitable for many decades, independently of economic downturns, recessions, fuel prices, etc. Even when they realized that the Rover acquisition was mistake, they *paid* a consortium to take it off their hands, too a 1-time multi-billion dollar write down, and were back in the black the next year. BMW is a tough act to follow, and an even harder one to beat.

What's the point of selling the most units,and being "No. 1", when No. 2 is laughing at you all the way to the bank? Is it worth forsaking profit in the name of bragging rights?

GermanNut - 5/4/2015 4:10:02 PM

+2 Boost

Audi's profit margin is still higher than BMW's. Pretty soon BMW will lose its global sales leader title as well. Despite increased costs due to new model development in it quest to catch BMW, Audi is still an extremely profitable company thanks to its synergies as a member of the Volkswagen Auto Group.

BMW's independence will hurt it in the long run as it will be unable to compete with the competition that can create new models faster and at a lower cost than BMW.

MDarringer - 5/4/2015 8:56:25 PM

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This is the same idiocy that VW chases Toyota with.

CactoesGe1 - 5/4/2015 9:48:00 PM

+4 Boost

Hey moron, it's losers not "looser's."

LJ745 - 5/6/2015 7:07:29 AM

+2 Boost

Audi had better be careful. Overextending is what hurt GM, Ford, Chrysler, the list goes on. Too big and you become inefficient, make errors, and culture suffers.