From YourSITE.com
117th Annual General Meeting Speeches
By source: Audi AG
May 17, 2006, 18:29
Prof. Dr. Martin Winterkorn, Chairman of the Board of Management, AUDI AG
Part 1: Review of 2005
Ladies and Gentlemen,
A warm welcome to our 2006 Annual General Meeting.
I wish to start today by saying something about the most important figures and events in 2005. I will then hand over to our Board Member for Finance, Mr Rupert Stadler, who will explain the key company figures to you. In the second part of my report, I will then focus on the current situation at Audi and take a look forward to the future.
2005 was a very good year for Audi.The total revenue generated by the Audi Group in 2005 rose by 8.5 percent to the highest level to date, around EUR 26.6 billion. Our profit before tax also improved further on the previous year – by 14.6 percent – and amounted to more than EUR 1.3 billion. We sold more than 829,000 vehicles in 2005 – more than ever before. This is equivalent to an increase of 6.4 percent on the year before – and also means 50,000 new customers!
Audi sales have continued to rise steadily over the last ten years – even in difficult economic periods. 2005 was the tenth record year in succession.
We achieved record sales figures in 39 markets in 2005. We made further significant gains in the major European markets in particular.
Europe remains the most important mainstay of our success. Despite extremely varied underlying economic conditions and market situations, we increased sales in this region by 7.4 percent. The Western European market excluding Germany recorded a rise of 8.4 percent to over 351,400 vehicles. The positive development in Eastern Europe continued in 2005, with a sales increase of 19.9 percent to almost 21,000 vehicles.
Audi is the undisputed number one among manufacturers offering premium cars in China.We sold almost 59,000 vehicles there in 2005 (including Hong Kong). The A4 is selling particularly well, with the long-wheelbase version of the A6 specially developed for the Chinese market also proving to be a fast-seller.
The largest individual export market is the USA with more than 83,000 units. This represents a year-on-year sales increase of 6.6 percent.
Audi sold over 247,000 vehicles in Germany, 5.1 percent more than in 2004.
Let us now take a short trip to Italy – to Lamborghini. 1,600 of our super sports cars were delivered to customers in 2005, the majority of these in Germany, the USA and Western Europe.
Let us move on now to other key figures for the Audi Group: the vehicle production volume at Audi and Lamborghini expanded by 3.4 percent to just under 812,000 units. So as well as achieving the best-ever sales figures for the tenth year in succession, we also set a new production record.
Engine production at our Hungarian plant in Györ rose by 14.1 percent to 1.7 million units. In summer 2005 we built the 10 millionth engine in Györ.
The number of employees in the Audi Group at the end of December was approximately on a par with the previous year, at around 52,400. Audi provides around 45,000 secure jobs in Germany alone.
Our company agreement entitled “Audi’s Future” from April 2005 rules out redundancies for operational reasons up to the year 2011.
Ladies and Gentlemen,
A key factor behind Audi’s success is the design of its vehicles.
2005 saw all Audi models finally get their “new face” – the single-frame radiator grille. This even sportier look has been received positively without exception by customers and experts alike.
Besides design, sportiness, quality and reliability are what make our vehicles so fascinating. And it goes without saying that this fascination is exuded by new models in particular.
The Audi Q7 celebrated its world premiere at the IAA Motor Show in Frankfurt.
We also presented our new A4 Cabriolet at the IAA.
We presented our luxury-class sports car, the S8, at the Tokyo Motor Show, Asia’s most important car exhibition, in October.
The Shooting Brake study, a combination of sports coupé and Avant, was another highlight in Tokyo.
Ladies and Gentlemen,
The many awards that we received for our cars in 2005 are gratifying confirmation of the international success of the Audi brand. I’m afraid it would take far too long now to list all the prizes that we have received.
But just one example: the new Audi Q7 picked up two important awards although it wasn’t even in dealers’ showrooms at the time – the “Golden Steering Wheel” from the “Bild am Sonntag” and the “Auto Trophy” from the readers of “Autozeitung”.
Allow me to say something briefly about motor racing in 2005: the Le Mans 24 Hours was both extremely exciting and successful. Together with JJ Lehto and Marco Werner, Tom Kristensen clinched Audi’s fifth Le Mans win in the Audi R8.
This once again confirms our decision to participate in motorsport. I’ll be saying more about this in the second half of my speech.
But that’s all from me for the moment. Thank you for your attention. I’ll now hand over to the Board Member for Finance and Organisation, Mr Rupert Stadler.
Rupert Stadler, Board Member for Finance and Organisation, AUDI AG
Ladies and Gentlemen,
Shareholders,
I am delighted to welcome you to this year’s Annual General Meeting with a whole array of positive business figures, as in previous years. The continuation in Audi's success story is thus once more also clearly mirrored by the financial data for our company.
Our market context continued to be dominated by high pressure of competition last year. We nevertheless maintained our uninterrupted string of successes over recent years and achieved new record-breaking vehicle sales – for the tenth year in a row. Our revenue, too, reached a new record high. Important performance indicators such as the operating result and profit before tax were likewise up on the prior-year figures.
Audi was thus once again able to sustain the steady growth of recent years. We have yet again achieved our objective of qualitative growth.
I will now explain our key financial figures to you in detail. First of all I will look at how key items in the Income Statement developed in the past financial year.
We succeeded in boosting revenue by 8.5 percent, to EUR 26.6 billion. As I just mentioned, this is a new record figure for the Audi Group.
Revenue in our home market Germany made very pleasing progress. We succeeded in boosting sales of vehicles of the Audi brand by well above the market average there. Revenue consequently increased by 7.1 percent to almost EUR 8.4 billion.
In Europe excluding Germany, the rate of increase was even more marked at 10.8 percent. Revenue reached EUR 13.5 billion for this market. With the market as a whole remaining flat, we thus further consolidated our brand strength.
The North American car market continued to be dominated by an aggressive price war in 2005. Yet even the high incentives being offered to customers by countless volume manufacturers failed to haul the market out of its stagnation over the year as a whole.
Despite this unfavourable market context, Audi fared well. We pushed up vehicle sales to more than 83 thousand by the end of the year. Revenue was likewise up on the prior-year level at almost EUR 2.4 billion, despite the continuing weakness of the dollar.
We are of course not content to rest on our laurels. We will be tackling this very important market even more intensively in the future in order to pave the way for quantitative growth through higher quality. To that end, we will be restructuring and further optimising our dealer network. We moreover expect new models such as the Audi Q7, our new premium SUV that will be appearing from mid-way through the year, to provide a vital impetus. The Audi RS 4 is about to be launched in the US market in a few weeks’ time. That model, too, will lend further momentum to the image of the Audi brand and therefore to our sales and revenue figures.
We also intend to maintain our growth in the current financial year, but above all are aiming for significant structural and qualitative improvements.
In the Asia-Pacific region the Audi Group increased its revenue by almost 5 percent, to over EUR 2.0 billion.
This positive development is due in no small measure to the changes to our sales structures in China. Audi assumed full responsibility for its sales activities on September 1, 2005. This means first and foremost that both imported and locally built Audi vehicles are now being sold via a uniform, exclusive sales network currently comprising around 120 dealers. Our new sales structures have given us an outstanding basis for future growth in the Chinese market. And this measure is helping to secure our unchallenged market lead in the premium segment in China.
Ladies and Gentlemen,
After this brief explanation of the regional focal points of our business, now back to the main items in the Income Statement.
The cost of sales rose at a much slower rate than revenue last year, to around EUR 23.4 billion.
This development is due, among other things, to further significant productivity improvements in the production sphere and considerable improvements in purchase prices.
We correspondingly succeeded in improving the gross profit by a notable 25.6 percent to just under EUR 3.2 billion. This figure already includes the ongoing revenue-diminishing effects of exchange-rate factors.
The market situation that we were confronted with last year was still dominated by high pressure of competition and intense price wars.
As a result of these circumstances our distribution costs rose by 7.0 percent to around EUR 1.9 billion. Like the cost of sales, however, this rise was lower than the rate of increase in revenue.
Administrative expenses were roughly on a par with the previous year at EUR 240 million.
The other operating result fell to EUR 372 million in 2005. This development was due primarily to the lower result from currency hedging transactions and the write-down for currency translation reasons of the pro rata operating assets of one foreign company.
We thus achieved an operating result of slightly more than EUR 1.4 billion. This represents a highly satisfactory increase of 14.5 percent. As you can see from the chart, a very welcome figure compared with other years, too.
The qualitative growth that I mentioned earlier, in particular that which stems from improvements to our model and equipment mix, is consequently also reflected in the development in earnings. At the same time, our ongoing process and cost improvement measures are helping to bring about a steady, lasting improvement in the quality of our earnings.
The higher interest income as a result of the rise in cash and cash equivalents was unable to compensate in full for the negative factors affecting the financial result.
For example, income resulting from accounting for the shares in FAW-Volkswagen Automotive Company, Ltd. using the equity method – Audi holds a 10 percent stake in that company – failed to match the previous year’s level. Higher expenses from the total interest on provisions likewise diminished the financial result, which thus fell to minus EUR 107 million for the 2005 financial year.
Profit before tax for the Audi Group exceeded EUR 1.3 billion last year. This figure was a remarkable 14.6 percent up on the previous year.
Ladies and Gentlemen, as you will be aware, the profit before tax of the Audi Group incorporates the individual earnings figures of AUDI AG and of its consolidated subsidiaries. I would therefore like to outline the earnings of the principal group companies at this point.
AUDI AG posted a profit before tax of EUR 939 billion, over 22 percent up on the previous year. In addition to volume growth for vehicle sales, this rise was attributable above all to the improved model and equipment mix. I already mentioned both effects earlier on.
AUDI HUNGARIA MOTOR Kft., too, maintained an unbroken trend of positive earnings in 2005. The profit before tax of our Hungarian subsidiary amounted to EUR 320 million last year, almost 7 percent up on the prior-year figure. The higher income from engine production operations more than outweighed the negative effect of the cyclical fall in TT sales.
The companies that comprise the Lamborghini Group, in this case excluding Autogerma, posted a profit before tax of EUR 4 million that was on a par with the previous year.
The higher sales volume and an improved model mix led to higher pre-tax profits at AUTOGERMA S.p.A. The profit before tax of our Italian sales subsidiary reached EUR 69 million in 2005.
We can likewise report a successful financial year for quattro GmbH, with profit before tax rising by 25 percent last year, to EUR 35 million. With production of the RS 6 having ceased in 2004, the launch of the Audi RS 4 at the end of 2005 initially proved a burden on earnings from vehicle business. However, the positive development of business for the S line and alloy wheels sectors more than compensated for these negative effects.
I should now like to follow this brief review of the business progress of our main group companies with some remarks on the key figures in the Income Statement.
The tax expense of the Audi Group amounted to EUR 486 million in the 2005 financial year and was therefore up on the previous year. The overall tax ratio was 37 percent. The rise compared with the previous year is primarily due to a one-off effect in 2004. Under IFRS accounting rules, the tax relief on capital investments by AUDI HUNGARIA MOTOR Kft. was reported as deferred tax income last year. This one-off income meant that we benefited from lower overall tax expense in 2004. Now that the one-off effect no longer applies, the tax expense of the Audi Group returned to a normal level in 2005.
Our profit after tax correspondingly amounted to EUR 824 million.
After deduction of EUR 462 million by way of profit transfer to Volkswagen AG, the net profit remaining for the Audi Group amounted to EUR 362 million.
As you can see, the absolute earnings figures in the Income Statement supply impressive evidence of our achievements in the past financial year. These achievements are moreover also reflected in our key performance ratios.
The rate of return before tax, for instance, rose from 4.7 percent to 4.9 percent. The rate of return from operating activities actually rose to more than 5.3 percent.
We were able to boost the return on investment to 9.7 percent. The main driving forces behind this welcome development were our higher operating result, our efficient investment management activities and our methodical approach to working capital management. The return on investment achieved in 2005 puts us well on the way to achieving our long-term target of a return on investment of more than 10 percent.
Ladies and Gentlemen,
Now that I have commented on the main items in the Income Statement, I will explain the development of relevant cash flow ratios.
The methodical management of our working capital that I just mentioned, together with the higher profit before tax, has had a positive impact on the cash flow from operating activities. At more than EUR 3.2 billion, it was almost 21 percent up on the already high prior-year level.
The Audi Group spent EUR 1.7 billion in 2005 as a result of investing activities. That represents a decrease of more than 11 percent on the previous year. Thanks to our systematic investment management, we were nevertheless able to implement all product and investment plans to our own high standard of quality and according to schedule.
As a result of the substantial rise in cash inflows for operating activities and active management of cash outflows for investing activities, the net cash flow rose to more than EUR 1.5 billion – this was actually double the previous year’s level.
The positive development in cash flow is of course also evident in the net liquidity of the Audi Group. This rose by 67 percent, to EUR 3.4 billion at the end of the past financial year. We have consequently established an excellent basis for realising our self-imposed growth objectives that have self-funding as their aim.
Capital investments fell from just under EUR 2.1 billion to around EUR 1.7 billion last year. Property, plant and equipment accounted for 67 percent of this total, or slightly more than EUR 1.1 billion. Development expenditure recognised as an intangible asset accounted for EUR 543 million. This was just under one-third of total capital investments.
We reduced the ratio of development expenditure recognised as an intangible asset to 35 percent in 2005, thus easing the future burden by the lower amounts capitalised.
Ladies and Gentlemen,
Finally, I would like to present how key balance sheet items developed. In that connection, I should point out that a number of accounting standards changed last year. The prior-year figures in question have been adjusted accordingly, for ease of comparison. In the case of the Audi Group as a whole, the changes had no significant effect on the presentation of the financial position and financial performance.
The balance sheet total rose by 8.1 percent, to EUR 16.1 billion.
Non-current assets fell by 4.2 percent to approximately EUR 8.6 billion. Both property, plant and equipment and intangible assets fell, principally as a result of lower additions and higher depreciation and amortisation.
On the other hand, current assets rose by almost 27 percent to more than EUR 7.5 billion. The key factor behind this development was the substantial rise in cash and cash equivalents of more than EUR 1 billion, to at least EUR 3.1 billion.
As you can see, we likewise have ample financial resources set aside for the future, and in the long term these will enable us to secure the growth we are aiming for by our own efforts, through extending our model range and tapping into new markets.
Equity at December 31, 2005 was up 4.7 percent to EUR 6.1 billion. This rise was due in particular to the capital injection of EUR 195 million by Volkswagen AG, and also to the allocation of the balance of the consolidated net profit of EUR 362 million to the other retained earnings. These effects were offset to some extent by the burden on the reserve for actuarial losses and gains from the calculation of retirement benefit obligations of minus EUR 192 million. We reported this separate reserve within equity for the first time in the 2005 financial year in line with the revised accounting standards.
Taking account of the adjustments for previous years, the accumulated negative effect at the end of 2005 amounted to EUR 352 million.
As a result of the sharper rise in the balance sheet total compared with shareholders’ equity, the equity ratio rose by 1.2 percentage points to 37.9 percent.
Liabilities totalled somewhat more than EUR 10.0 billion at the end of the past financial year, and were therefore 10.3 percent higher than one year previous.
Non-current liabilities moved only slightly compared with the previous year and totalled EUR 4.2 billion.
On the other hand, current liabilities rose by a substantial 21.3 percent to EUR 5.8 billion. This development was attributable in the first instance to the higher liabilities and provisions for current operations. And second, we also had to account for higher liabilities as a result of the exchange-rate-dependent fall in the market values of foreign exchange contracts. Liabilities to affiliated companies rose as a result of the higher profit transfer to Volkswagen AG than in the previous year, among other reasons. This was furthermore the first year in which the advances received from car hire companies in connection with buy-back transactions were accounted for.
As already the case in previous years, the balance sheet structures as a whole, too, reflect our group’s healthy course of growth.
Ladies and Gentlemen,
To close, allow me to take stock again briefly of our key performance indicators in the 2005 financial year:
We succeeded in increasing worldwide sales of the Audi brand by 6.4 percent.
In spite of exchange rates remaining adverse and the intensive pressure of competition, we enjoyed a disproportionately high rise in revenue compared with sales of 8.5 percent, to EUR 26.6 billion.
We can also be justifiably proud of our profit before tax. This indicator likewise reached a new record level of EUR 1.3 billion.
Our financial strength is also impressively reflected in the rise in net liquidity of almost 67 percent to EUR 3.4 billion.
Ladies and Gentlemen,
2005 was one of the most successful years in Audi’s history.
On the one hand the positive trend in our sales figures bears testimony to the quantitative growth of our company over the past year. On the other hand, the disproportionate rise in our key financial performance indicators compared with volume growth demonstrates impressively that Audi has grown most notably in qualitative terms.
I now wish to say a few words about our company’s immediate prospects.
We are not expecting to see any fundamental improvement in the general market conditions during the current year. Nor is there any prospect of the pressure of competition in the premium segment abating.
I am nevertheless convinced that we are all set to build on our success in the 2006 financial year. We gave ourselves an excellent basis upon which to accomplish this by launching an array of new models last year. We are continuing our campaign with sustained vigour.
You will be able to admire many of our new products today in our assembly hall – for instance our new premium SUV, the Audi Q7, or the follow-up models to our successful TT and A6 allroad quattro. We are also systematically broadening our product range by adding sporty S versions such as the S3, S6 and S8.
With this raft of new products, we can be duly confident of being ready for another quantum leap in growth.
Our attention is of course also focused on continually improving our processes. Steady cost optimisation will be another important means of attaining our growth targets over the next few years.
Thank you for your attention.
Prof. Dr. Martin Winterkorn, Chairman of the Board of Management, AUDI AG
Part 2: Current situation and outlook
Ladies and Gentlemen,
International competition in the car industry is tough and we car manufacturers have to live according to the principle of “Push them out before you get pushed out yourself.”
Japanese manufacturers, for example, have announced that they are to expand significantly in the European market.
The fact that Audi is so well positioned is the result of a product and brand strategy geared to the long term. Our core competence is to build sporty, high-quality cars. This applies in equal measure to our high-volume saloon segments and our exclusive niche products.
We are supplementing our A3, A4, A6 and A8 model lines with fascinating new models. Examples include our S and RS models, Cabriolets and the new Audi Q7. Part of our strategy is to achieve higher volumes and expand significantly with the help of additional new models and model versions.
We are continually increasing the efficiency and productivity of our locations – in the areas of development and production as well as in indirect areas. Nonetheless, our plants are operating at full capacity – thanks to our increasing sales volume.
We are aiming to break through the magic sales barrier of one million vehicles as early as the end of 2008. And this will just be an intermediate goal! By the year 2015 we plan to be selling at least 1.4 million vehicles a year.
In order to achieve this, we are looking to exhaust the potential of existing markets. We have already made progress in this respect: last year we succeeded in boosting sales in Spain, France and Italy, for example, by at least 10 percent.
We likewise have a sound foundation in the difficult domestic market of Germany: last year we managed to boost our market share by 0.2 percentage points, to 7.4 percent.
The latest economic forecasts for the German economy are cautiously optimistic. The increase in VAT planned for 2007 is expected to prompt people to buy a new car this year instead. The question remains, though, as to what the state of the economy will be like in 2007.
Whatever happens, Audi will stand firmly by Germany as a production location.
45,000 highly qualified and motivated employees make our success possible. It goes without saying that we have to continue increasing productivity in order to survive in the face of fiercer competition. Our new, intelligent vehicle architecture, the “modular longitudinal platform” as we refer to it internally, is already producing clear synergy effects. And our growth strategy will enable us to maintain the size of our workforce at the current level – the ideal basis, in other words, for further increasing revenue and sales.
In its latest car index, the market research institute “Puls” even comes to the conclusion that “no other car brand will grow as strongly as Audi over the next few years.”
In its course of expansion, AUDI AG is becomingly increasingly less dependent on German domestic demand. This is because we are developing more and more into a globally active company: in 1995 we still sold almost 46 percent of our vehicles in Germany. This figure was below 30 percent in 2005.
Our sales in the USA and Asia alone have increased from 13 to over 22 percent in the last ten years.
In China, Audi has been the leader in the premium segment for some time. And we are currently in the process of extending our lead further: from January to April we enjoyed an extremely high rate of growth and succeeded in more than doubling the previous year’s figure by selling just under 27,000 vehicles.
Our standing in terms of reliability and customer satisfaction also confirms our strong position: Audi came out on top yet again in the J.D. Power rankings for China.
And thanks to what now amounts to around 120 exclusive Audi Centres in China, we will continue to increase our volume in this important growth market.
There is still considerable potential in the USA. The new Audi Q7, which is being launched in the USA in the next few days, will of course have an important role to play here.
Between January and April we sold just under 26,000 vehicles in the USA, which is equivalent to an increase of 5.2 percent. We are looking to sell around 90,000 vehicles in the whole of 2006. In the USA, we will therefore be strengthening our profile as a premium manufacturer and investing in the dealer network together with our sales partners. We will be focusing on 25 major cities in particular.
It is important to exhaust the potential of existing markets.
But it is equally important to open up new markets.
One good example is Russia, where we achieved an enormous growth rate last year of almost 50 percent, to more than 6,100 vehicles.
And things are continuing at this pace: we already sold more than 2,500 vehicles in Russia in the first four months of this year.
We will continue to push on with our strategy of tapping new markets this year – in Eastern Europe, India, Korea, Australia and the Golf States, for example.
But growth and high volume are not everything: we will increase the value added per vehicle in order to increase our profits. We are already on the right path here, too: to start with, we are reducing our unit labour costs by means of optimised production processes and flexible working hours. At the same time, we are offering our customers numerous attractive optional extras.
For Audi, the trend towards vehicle customisation is an important means of increasing the profit generated per vehicle. More and more often we are selling exclusively equipped cars that cost more than 200,000 euros.
The increasing proportion of optional equipment is closely related to our brand’s high prestige. Not only that, but numerous surveys provide confirmation of Audi’s outstanding image.
For example, Audi performed extremely well again in the readers’ poll to find “The best cars”, which was published in the German magazine “auto motor und sport” in February.
And once again it was the most successful brand – just like last year. More than 100,000 readers took part in the German poll alone.
As well as the A3 and the A6, the A8 was also awarded the title of “best car” again. The A8 has now topped the luxury class four times in a row.
But these awards were by no means the only ones that we collected in the first few months of this year.
The readers’ poll of the trade journal “AUTO BILD alles allrad”, for example, saw two Audi models winning through against the competition to claim the title “four-wheel drive car of the year 2006”. These were the Audi Q7 in the “luxury-class off-roader and SUV” and the Audi A8 quattro in the “luxury-class four-wheel-drive passenger car” category. The quattro versions of the A3, A4 and A6 also made it on to the podium in their respective classes.
Audi achieved a quadruple success in the 2006 fleet awards presented by the German magazine “Autoflotte”. The models Audi A3, Audi A4, Audi A6 and Audi A8 all finished top of their respective categories.
Allow me to single out just two other prizes: AUDI AG was presented with the “Best of European Business Award” as one of the nine most competitive companies in Europe. This renowned prize is awarded jointly by the management consultancy firm Roland Berger and the Financial Times.
And our Toolmaking Division in Ingolstadt also received the recognition it deserves in the form of the “Bavarian Quality Award”. The Bavarian Economics Minister Erwin Huber handed over the prize in the category “Corporate Quality in Industry”, for outstanding quality management in toolmaking.
The high quality of our vehicles is an important basis for Audi’s success. We are therefore working intensively on further increasing our quality.
The latest ADAC breakdown statistics, for example, in which we performed extremely well again, confirm that we are on the right track.
As in previous years, the A2 and A6 both came first in their categories, and the A3 and A4 likewise finished in the first few places.
Ladies and Gentlemen,
Our long-term goal is to become the world’s most successful premium brand.
The latest figures speak in favour of the fact that we are getting ever closer to achieving this goal.
Vehicle sales in the period from January through April 2006 were up 12.1 percent on the year before to almost 304,000 units. This means that we have just had the best four months in our company history.
Sales of the Audi A8, for example, were up by 19.1 percent in the first four months of this year!
And in the same period, our A6 even became the world market leader in the premium C-segment. Sales of the A6 between January and April were up by 42 percent to around 80,000 vehicles.
What’s even more gratifying to note is that the rise in revenue is disproportionately high compared with sales. We therefore expect the key financial performance indicators including profit to be at least as good this year as last year. We are optimistic that we will achieve a return on investment of at least 10 percent this year. Our goal is to achieve a rate of return of six percent by 2008, and, once again, we are extremely confident of reaching this target.
So the year has got off to a very good start for Audi. We will continue to keep up this pace and expect to achieve new record figures again in 2006. Our goal is to sell around six percent or up to 50,000 more cars this year than in 2005.
The sportiest member of the Audi brand group, Lamborghini, is really taking off again. It is already apparent that we will clearly surpass last year’s sales record this year, with sales of more than 1,800 cars expected.
The annual production of the Lamborghini Gallardo Spyder for 2006, for example, is already sold old.
The 2,000th Murciélago was built in the first quarter of 2006, while the 3,000th Gallardo left the production line in Sant’Agata back in November 2005.
The new Murciélago LP 640 super sports car was presented at the Geneva Motor Show in March 2006, with plans to produce 1,600 of this model by 2010.
The number of dealers has risen from 65 to 85. New dealerships in growth markets such as Russia, China and Singapore deserve a special mention.
Ladies and Gentlemen,
There’s also news of success at SEAT, a brand that is undoubtedly enjoying an upward trend again! On the one hand, an extensive reorganisation programme is providing the necessary stability. At the same time, the company’s sales figures are developing at an outstanding rate. With an increase of around 20 percent in the first quarter of 2006 compared with the previous year, the brand expanded in Germany at a much sharper rate than the overall market (6.4 percent). Over 6,000 new SEAT cars were registered in Germany in March 2006, 23 percent more than in the same month last year. The Ibiza and Leon model lines are selling particularly well. And one thing is certain: we will be adding further attractive models to this product range. Lower entry-level engine versions will also attract new customers to the brand.
But let’s get back to the Audi brand.
In order to achieve our ambitious growth targets, we launched a model drive last year which is set to continue for quite some time.
One of the highlights at the Detroit Motor Show was the new S6 with V10 FSI engine which delivers 435 horsepower. We presented this luxury sports car to the press in Neckarsulm at the end of March – and received an extremely positive response. Its market launch is scheduled for June.
Another highlight in Detroit was the Roadjet Concept study. This interesting vehicle offers its occupants a clear bonus in terms of space and comfort. And it presents another electronic innovation: Audi drive select allows the driver to pre-select various vehicle characteristics – from comfortable to sporty. This not only changes the suspension and damping, but also engine characteristic, transmission and steering.
The Audi Q7 also features a number of innovations – in the field of driver assistance systems, for example: adaptive cruise control is a radar-assisted cruise control system with automatic distance control and obstacle warning.
Audi side assist is specially designed for lane-changing and helps the driver by monitoring the blind spot.
Incidentally, we have just been awarded the “Innovation of the Future” award for this new concept by Germany’s biggest consumer magazine “Guter Rat”.
And finally, the Audi parking system advanced uses a rearview camera to make sure the driver can manoeuvre safely into any parking space.
The Audi Q7 has been in European dealers’ showrooms since March 10. The response from our customers has been overwhelming. Up to yesterday we had received over 30,000 definite orders – an outstanding figure! We have increased production from 200 to 300 units a day to make sure that we are able to deliver all orders as soon as possible. We plan to produce more than 60,000 of the Audi Q7 in 2006 and to deliver around 50,000 of this model to customers.
The proportion of diesel models ordered has been very dominant so far. But this about to change because orders have also been coming in from the USA and Asian markets since May.
So what other models will help to make sure that Audi achieves new record figures again this year?
The Avant and Cabriolet versions of the RS 4 saloon presented last year celebrated their world premiere at this year’s Geneva Motor Show.
We will be presenting these power packs, with their 420 bhp high-revving engine, to the press in Rome in the next few days. The market launch will follow in the next few weeks.
We also presented the successor to the allroad quattro in Geneva. The new Audi A6 allroad quattro with quattro drive as standard puts up an even more dynamic performance – both on the motorway and across open terrain. The driving event for the press took place recently in Merano. This model will be launched in early June.
The world premiere of the new Audi TT Coupé at the start of April was particularly spectacular.
As part of the initiative “Germany – Land of Ideas”, we started by unveiling a giant car sculpture in front of the Brandenburg Gate, watched by numerous prominent guests. Directly afterwards, the new version of our design icon drove through the Brandenburg Gate. We now wish to show you a short film to give you a sense of what the atmosphere was like at this event.
As you will have seen for yourselves, the politicians Franz Müntefering, Edmund Stoiber and Klaus Wowereit, the footballers Ronaldo, Zinedine Zidane and Bastian Schweinsteiger, the legendary racing driver Jacky Ickx and many other celebrities had the honour of attending our TT presentation. And the response was extremely positive. The new model will continue the great success of the TT. The new TT will be powered by sporty engines, combined throughout with DSG. It will be launched in September.
I am particularly looking forward to our R8 sports car, which you can see pictured here as a study. This will be launched with a 420 bhp 4.2-litre engine, with other attractive engine versions to follow at a later date. The start of production will be in Neckarsulm at the end of 2006; the market launch will follow in 2007.
I’m afraid I’m unable to show you any pictures yet of the following models that we will be launching slightly later on:
The S3 will be a three-door model with a sporty engine. It will be in dealers’ showrooms in the second half of 2006.
The A5 Coupé will mark the start of a new technical generation.
Like the R8, the A5 will open up a new segment for Audi. We will be building the A5 Coupé here in Ingolstadt and launching it in the first half of 2007.
To conclude, I would like to say a word about motor racing.
The new Audi R10 racing car has already attracted considerable interest. This car is fitted with a high-performance 12-cylinder diesel engine and is designed to underline our expertise in the field of diesel technology, especially in the USA. It came through its baptism of fire at the 12 Hours of Sebring on March 18 with flying colours to take the chequered flag first.
We are, of course, hoping that this revolutionary vehicle concept will also take us to victory at Le Mans next month.
With Audi and Mercedes, two of the leading premium manufacturers are competing against each other in this season’s DTM competition.
This is a repeat of the duel between the legendary Silver Arrow models of Auto Union and Mercedes-Benz that captivated spectators 70 years ago.
Around 100,000 spectators were treated to exciting races and a strong performance by the Audi team at Hockenheim and the Lausitzring. The next race is at Oschersleben on Sunday.
Ladies and Gentlemen,
Allow me to summarise:
- In 2005 we posted record figures for vehicle sales, production, revenue and profit.
- With our renewed and expanded product range, we are laying the foundations for even greater successes in existing and new markets.
- We are systematically continuing our model drive and expect 2006 to be another record year for Audi.
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Our success wouldn’t be possible without the enthusiasm of our employees. On behalf of the Board of Management of AUDI AG, I would therefore like to thank all our employees worldwide for their hard work. In our company agreement “Audi’s Future” we have decided to introduce an additional performance-related bonus for employees when the operating result reaches a certain level. If we look at the past financial year, we see that the requirement for this extended profit share for employees has been fulfilled. This means that we will be giving our employees a greater share in our company’s profits than was previously the case.
We would also like to thank our customers most sincerely for their loyalty. And I would like to thank you, Ladies and Gentlemen, for your attention.
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