Audi braces for lower profitability even as car sales rise

[INGOLSTADT, Germany] Audi is targeting another year of record car sales in 2015, helped by growing demand in world markets, but said profitability could slip further amid persistent spending on technology, models and foreign expansion.

An expected increase in 2015 deliveries beyond last year's record 1.74 million cars may lead to a "moderate" rise in sales which in 2014 climbed 7.8 per cent to 53.8 billion euros (S$80.27 billion), VW's flagship luxury division said on Tuesday.

Audi stuck to its 8 to 10 per cent target range for its margin on operating profit this year, after the benchmark for comparing profitability with rivals slipped to 9.6 per cent last year from 10.1 per cent in 2013.

"The profit development (this year) will continue to reflect our company's extensive expenditure for the future," finance chief Axel Strotbek said in remarks prepared for delivery at Audi's annual press conference in Ingolstadt, Germany.

REUTERS