They present visions as memorized, fight with phrases against the crisis – on Thursday they try AudiChiefs to look optimistically into the future of the flagging carmaker. At the annual press conference 2019 in Ingolstadt, production boss Peter Kössler (59), for example, talks about sustainability, about wild herbs and flowers on the planted roofs of the Audi buildings. He promises a “green miracle” and says, “As you can see, I’m excited about it.”
After that, no one asks, after the boards of the VWDaughter have finished their presentations. It is interested in Audi’s poor development in 2018.
The carmaker delivered 1.81 million models less than in the previous year (1.88 million) and achieved slightly reduced sales of 59.3 billion euros (2017: 59.8 billion). The diesel crisis Audi alone cost 1.2 billion euros last year and beat the operating result. It was 3.5 billion euros, the return on sales thus at 6 percent – much lower than the hoped for 8 to 10 percent.
The return on investment (ROI) also fell further and missed the desired brand: In 2011, it was still at a respectable 35.4 percent, it was still 14.4 in 2017 and only 10 percent in 2018. CEO Bram Schot (57) sees 2019 as a “transition year” – expectations are modest.
Many legacies for the new CEO
The new CEO was followed in June on Rupert Stadler (55), because of his role in the diesel affair immigrated to custody, Schot is now to address the mismanagement of recent years: Slowly abolish structures, overpricing overpriced development processes and make up for the false start in the new consumption and emission standard WLTP. Many of the Audi engines are not yet certified and may not be sold. All this damages the business.
With a 15 billion euro austerity course, Bram Schot wants to tear down Audi’s descent. That would not be comfortable, says chief financial officer Alexander Seitz (57). “But we put the profit zone before the comfort zone.”
But the 90,000-strong workforce is expected to shrink. There will be no redundancies, confirms staff director Wendelin Göbel (55) on Thursday again. To the employment guarantee until 2025 hold one. To be dismantled by partial retirement, along the demographic curve. However, many of the jobs that should be dropped are not enough to impress Audis top managers at the press conference despite numerous inquiries.
“A little fat here and there”
As manager magazin (2/2019) reported recently, Seitz does not want to fill vacancies. That would be about 15 percent of the workforce in five years – or extrapolated and not confirmed by the Board, 14,000 jobs.
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As Audi CEO Schot explains in Ingolstadt, upper hierarchical levels should also be thinned out. In recent years, many managers have been hired. That created a lot of interfaces, which one could not afford anymore. There would be “a little fat here and there”, Audi could still “fat loss” in some places.
For the future, it should be the electrification at Audi. From 2023 the car manufacturer wants to offer twelve, from 2025 about 30 hybrids and electric cars. Schot explains that customers are turning to electric cars faster than expected. The infrastructure would have to be expanded, but in three to four years this would only be a start-up problem. The CEO wants to sell a lot in China in the future. In 2022, a million Audis are to be sold there, most recently there were 660,000 cars.
So far, the electrical sector has been more than sluggish for Audi. Hybrids can not be delivered at this time because the WLTP certification of the engines is coming. One reason that Audi fell behind in the paragraphs behind the competition from BMW and Mercedes-Benz. Due to software problems, the delivery of Audi’s first all-electric model – the SUV e-tron – had also been delayed by the end of 2018.
“If we continue as before, we have no good future ahead,” says Schot. So he wants to invest not only massively in the electrification. Audi should change into a tech group. Models should be better networked according to customer requirements, many offers on the market were viewed there. Audi has learned not only from the young digital, but also from BMW and Mercedes, as Schot admits. The competitors are better off in terms of young customers.
Emotional discussions in the board
The development at Audi in particular has not been round in recent years. Hans-Joachim Rothenpieler (61) is since September the sixth man in the position of the development board in just under seven years. The manager is considered old school – his love for sports cars will also be clear on Thursday. Although Rothenpieler now wants to make Audi Sport attractive with electric variants. But at the weakening former trend model TT he holds. It belongs to the “DNA” of Audi. Sales have fallen sharply over the last few years. One discusses the topic “emotionally in the board”, so Rothenpieler.
To save money, the Audi bosses also test model and engine variants. Engine gearbox variants have already been reduced by about 30 percent – without any impact on sales, says Schot. The offer was “too wide and too deep”.
Furthermore, tasks between the works are to be redistributed. Thus, the goal set by VW boss Herbert Diess is to be achieved to increase the productivity of the plants by 25 percent in the next few years, Audi CEO Schot explains the plan: It is not efficient to electrify all locations. He wants to make better use of synergies in the Group and elsewhere. For example, the e-tron will be rolled off the production line at VW’s Zwickau plant from 2020, which is currently being completely converted and will be Volkswagen’s first all-electric plant Show stock market chart shall be.
Read with mm Premium: So VW builds the new electric car factory in Zwickau
The austerity program must soon show results, because pressure comes from all sides. Just last week, the VW owner family Porsche demanded that Audi should become more profitable again. In the clean-up year of 2019, however, expectations are low for the time being. Deliveries are expected to rise moderately. Sales are forecasted to slightly exceed the adjusted previous year’s level. The return on sales should recover somewhat and be between 7 and 8.5 percent.
In order to reverse the mistakes of recent years, a show of strength is needed. With the 15 billion transformation plan one places “everything to the test”, so financial director Seitz. “We look under every stone.” Schot draws the symbol of a duck: “Above water, it looks calm, down paddles like crazy.” Now she has to prove her stamina.