Audi looks to cut costs

Audi looks to cut costs

German car manufacturing giant Audi is looking at ways to drastically reduce its costs by around €2bn per annum in a bid to offset the increasingly large amount of money it spends on technical development. The company is looking to reduce and limit spending in areas that have seen costs spiralling, such as purchasing, development and manufacturing, and hopes that profit margins will be protected as a result. This information comes from an anonymous source; Audi has not made an official statement.

In a newsletter to company employees in July, Audi CEO Rupert Stadler stated that there would be a 'fitness program' and that Audi must be prepared to limit increasing costs. Audi is part of the Volkswagen Group and is its biggest earner. There are plans to introduce 17 revamped or new Audi models this year and to develop an electronic version of the R8 sports car. Audi's ultimate aim is to take over as the market leader from German rival BMW, which in 2013 retained its leading position in international sales for the ninth consecutive year. Audi has already announced a five-year investment budget of €22bn. 70% of this budget will be allocated to new products and research into new technology and the remaining 30% will predominantly be allocated to a manufacturing expansion programme, which will include new plants in Mexico and Brazil.