1 “Vier Marken – Vier Ringe”, AUDIAG, https://www.audi.com/corporate/de/unternehmen/historie/unternehmen-und-marken/vier-marken-vier-ringe.
html, (2017) 2 Europe2020 Strategy.” EuropeanCommission – European Commission, 14 Dec.2017, ec.europa.eu/info/business-economy-euro/economic-and-fiscal-policy-coordination/eu-economic-governance-monitoring-prevention-correction/european-semester/framework/europe-2020-strategy_en.3 “Corporate Strategy”, AUDI AG, http://www.
audi.com/corporate/en/company/corporate-strategy.html, (2017)4″Alle Modelle”, AUDI AG, https://www.
audi.de/de/brand/de/neuwagen.html, (2017)5 “Financial Reports.” > InvestorRelations > AUDI AG,www.
audi.com/corporate/en/investor-relations/financial-reports.html.6 “Audi Production Worldwide.” Audi.com, 2017,www.audi.
com/corporate/en/company/production-sites/audi-production-worldwide.html.7 “Ingolstadt.” Audi.com, 2017,www.audi.com/corporate/en/company/production-sites/audi-production-worldwide/ingolstadt.html.
8 “Neckarsulm.” Audi.com, 2017,www.audi.
com/corporate/en/company/production-sites/audi-production-worldwide/neckarsulm.html.9 “Gy?r.” Audi.com, 2017,www.audi.com/corporate/en/company/production-sites/audi-production-worldwide/gyor.html.
10 “Gy?r.” Audi.com, 2017,www.audi.com/corporate/en/company/production-sites/audi-production-worldwide/gyor.html.
11 “Changchun.” Audi.com, 2017,www.
audi.com/corporate/en/company/production-sites/audi-production-worldwide/changchun.html.12 “Aurangabad.” Audi.com, 2017, www.audi.com/corporate/en/company/production-sites/audi-production-worldwide/aurangabad.
html.Audi AG Group has spread its productionworldwide, creating 12 sites of production6, each one having a differentpurpose. The main Hub is located in Ingolstadt, Germany. It is the largest andmost famous Audi site, where the A3, A4, A5, Q2 lines are produced7.However, it is not the only German site. In 1969, the Company has created Neckarsulm,where Audi Sport GmbH is based8,which produces the R8 line and the RS models.
One of the characteristics thatdistinguishes Audi’s products in the Market, is the value of its engines. TheFirm highly focuses on performances, that is the reason why in 1993, they haveestablished a Centre in Gy?r, Hungary. Here, over 11000 employees (in 2016)9,operate in the assembly of almost 2,000,000 engines10,but just 122,975 automobiles. Hence, the priority has been given to theproduction of the engines for the whole Audi market. The Company has decided in1988 to increase its sales by expanding in the fast-growing Chinese Market. Themain Chinese headquarter is located in Changchun, where in 2016 555,788 carshave been delivered, becoming Audi’s biggest single market11.In addition to the Chinese opportunities, Audi is considering an expansion inone of the fastest rising market: India.
In fact, in 2007, they created a newsite in Aurangabad, and 5,665 automobiles were produced in 201612.a)Production4.Operations During thelast five years the numbers of cars sold by Audi has increased by almost 30 %,therefore obviously they have increased their revenue as well by almost thesame percentage.
However the cost of materials has increased due to theincrease of production and to the raw material market. As a result the profitof the company between 2011 and 2016 has not increased, and even slightlydecreased. There is an anomaly for the year 2016: the revenue is almost half ofwhat they had in the previous year. This sudden drop of net profit is due tothe ‘diesel scandal’ that happened in 2016, which will be addressed in our SWOT analysis.
5 3.Financial Analysis Audi designs, produces and sells luxury vehiclesglobally. In its corporate strategy they state: ‘Vorsprung is our promise. Weinspire through individual, sustainable premium mobility.
Our premium vehiclesare the foundation.’ 3’Vorsprung’ is the German word for progress. They offer comfortable,sustainable and technologically highly developed vehicles directly to consumers who, depending on the country,mainly include upper-middle to upper class.42.Business Model The Audi company acts upon the Europe 2020strategy in a variety of areas. The EU’s goal to have 75% of all people between20 and 64 employed, is highly supported by Audi as the company is amongst thetop-employers in the EU member states. Furthermore, Audi focuses on researchand development, especially regarding eco-friendly vehicles.
Thus at the sametime the firm supports the EU’s goal to lower greenhouse gas emissions by20%,supporting the development of hybrid cars. Lastly, Audi advocates theimportance of education and therefore supports the EU’s goal of an improvementof education, for example through the “Audi Education Partnership Program”. Inthis program Audi supports young professionals who are willing to educatethemselves financially and at the same time offers graduates attractivepositions within the company. The European Union developed a strategy for thecurrent decade, Europe 2020, to improve and stabilize the EU’s economy andpromote economic growth.
Europe 2020 has 5 main targets: increase overall employment, higher financialsupport for Research and Development, stronger focus on climate change andenergy, improvement of Education and reduction of poverty and social exclusion.Europe 2020 is used as a reference framework, thus has a strong impact on theactions of the EU and its member states. Europe 2020 is monitored and regulatedby the EU’s statistics office, Eurostat. 2b)Europe 2020 PrioritiesThe well-known automobilemanufacturer Audi has its roots back in the 19th century. Thecompany was founded in 1932 as the ‘Auto Union’. Audi is part of the VolkswagenGroup since the 1960s which merged the Auto Union with the NSU Motorenwerke in1969 and thereby laid the foundation of the company today. Designing, producingand selling luxury vehicles, Audi is one of the most successful automobilebrands in the world1.