$29 Billion: Amount Audi Will Invest Through 2019 to Take on BMW


Audi has been slowly gaining on front-runner BMW in the market for luxury cars, but its planned $29 billion in capital investments could accelerate the narrowing of the gap or even propel it to the front of the pack.

Audi's $29 billion effort is a revision of a previous plan. It's roughly $4 billion more than its previous five-year plan, an initiative that will run from 2015 to 2019.

The massive investment will be used to create sustainable growth, Audi stated in a press release. Approximately 70 percent of the investment will fuel new car models and technologies, according to Axel Strotbek, Audi's chief financial officer.

"Despite the growth in total investment, we will keep a watchful eye on the upcoming challenges and exercise the required cost discipline," says Strotbek.

It plans to create additional production capacities worldwide in the next five years, with large investments in electric mobility, connectivity and lightweight construction, said Rupert Stadler, Audi AG's chairman of the Board of Management, or CEO.

In early December, Audi reported that it is wrapping up a five-year run of record sales. For the last 47 of those 60 months, the Volkswagen subsidiary said it has enjoyed consecutive, month-to-month growth.

Through November, Audi reported that its U.S. sales totaled 162,773 on the year and 16,640 on the month. With its $29 billion investment, Audi is looking to make a decade out of it latest five-year run of long-term growth.

"A fifth consecutive year of record sales reflects the results of steady investment in products and technologies alongside enthusiastic dealer partners expanding the brand profile across America," says Mark Del Rosso, Audi of America's executive vice president and chief operating officer.

As Audi looks ahead to 2015 and beyond, the auto manufacturer isn't just working out what it can do to improve its cars and it technology. Audi is also looking at its human capital, seeking to expand its workforce and strengthen its existing staff, according to Thomas Sigi, an Audi Board of Management member for human resources.

"We will continue to recruit in 2015, thus underpinning our course of sustainable growth," says Sigi. "We want to strengthen our core competencies, especially in key technologies, with a strong team in the domestic plants."

While 2014 was another good year for Audi, BMW also reported strong sales in North America. The numbers don't compare evenly with Audi's U.S. numbers because BMW lumps in its Mini and BMW brands, but the world's top manufacturer of luxury cars reported 44,064 Minis and BMWs sold in North America during the month of November. That figure, however, was down roughly 0.6 percent year over year.

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