Audi must gear up for more challenging year ahead: CEO

FRANKFURT • Volkswagen's (VW) premium car unit Audi must brace itself for bigger, rather than smaller, challenges next year after turmoil this year surrounding the diesel-emissions scandal culminated in the arrest of long-time chief executive officer Rupert Stadler.

Audi needs readjustments, including polishing the brand's image, enforcing a culture change and strengthening its largest market, China, new CEO Bram Schot told workers on Thursday at a staff meeting in Neckarsulm, Germany.

"We must change things together now," he said in an e-mailed statement published by Audi's works council. He regards the next year as decisive and told 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 to the parent company's ability to afford some €44 billion (S$68.4 billion) in investments to develop electric vehicles and boost digital offerings such as ride hailing.

Mr 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.

Mr Schot had been named Audi sales chief last year as part of a management reshuffle, which had spared Mr Stadler. The company replaced more than half of its seven management board members at the time. Mr Schot joined from VW's light commercial vehicle division and had previously worked at Daimler.

  • 17%

  • Fall in Audi's global deliveries last month, as the brand lost further ground to the world's two best-selling luxury-car makers, Mercedes-Benz and BMW.

Audi's global deliveries slumped almost 17 per cent last month as the brand lost further ground to the world's two best-selling luxury-car makers, Mercedes-Benz and BMW.

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 per cent of revenue, well below the company's target range of between 8 per cent and 10 per cent. Still, net cash flow grew 22 per cent to €3.12 billion.

BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on December 15, 2018, with the headline 'Audi must gear up for more challenging year ahead: CEO'. Print Edition | Subscribe