New Audi CEO Says Headwinds Will Only Intensify After a Turbulent 2018
(Bloomberg) -- Volkswagen AG’s premium car unit Audi must brace for bigger rather than smaller challenges during 2019 after the long-running diesel-emissions scandal culminated in the arrest of long-time Chief Executive Officer Rupert Stadler.
Audi must polish its image, change the luxury brand’s culture and strengthen its presence in China, new CEO Bram Schot told workers Thursday at a staff meeting in Neckarsulm, Germany. Schot was confirmed as Audi’s top executive this week after helming the carmaker on an interim basis since Stadler’s June arrest.
“We must change things together -- now,” Schot said in a statement published by Audi’s works council. Next year will be decisive for the brand’s future, he said, telling employees that “we need all of you to exploit our potential and make sure the transformation works out.”
Sustaining Audi’s financial muscle is critical for the parent company’s ability to afford some 44 billion euros ($50 billion) in investments to develop electric vehicles and boost digital offerings like ride hailing. Audi’s first electric model, the E-Tron, will hit showrooms early next year, slightly later than initially planned. The brand’s following electric vehicles will be developed with sister brand Porsche to save costs.
Volkswagen fell 2.3 percent at 9:19 a.m. in Frankfurt trading, taking losses this year to 12 percent, as the STOXX Europe 600 Automobiles & Parts Index declined 2.2 percent.
Stadler, who led Audi for a decade, was released on bail in late-October. Investigations by German prosecutors into the use of diesel engine software to bypass emission tests are ongoing.
Schot had been named Audi sales chief last year as part of a management reshuffle, which had spared Stadler. The company replaced more than half of its seven management board members at the time. Schot joined from VW’s light commercial vehicle division and previously worked at Daimler AG.
Audi’s global deliveries slumped almost 17 percent last month as the brand lost further ground to the world’s two bestselling luxury-car makers, Mercedes-Benz and BMW AG.
A fine imposed by German prosecutors and other diesel-related costs pushed Audi’s operating profit margin in the first nine months to 6.5 percent of revenue, well below the company’s target range of between 8 percent and 10 percent. Still, net cash flow grew 22 percent to 3.12 billion euros.
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