Audi expects flat profit despite higher sales

PanARMENIAN.Net - Volkswagen AG's premium Audi brand said Thursday, March 1 it expects operating profit in 2012 to be similar to last year's level as rising costs offset higher sales volumes, but it said "considerable uncertainty" about the economic environment remains, The Wall Street Journal reported.

Audi's operating profit rose to €5.35 billion ($7.1 billion) in 2011 from €3.34 billion in the prior year. Net profit rose to €4.39 billion from €2.59 billion. Revenue improved to €44.1 billion last year from €35.4 billion in 2010.

Audi overtook Daimler AG's Mercedes-Benz brand as the world's second-bestselling luxury car maker after BMW AG in 2011 as sales rose 19% on the year to 1.3 million vehicles, marking a new annual sales record for the Ingolstadt-based company. BMW's namesake brand sold 1.38 million cars last year, up 13% from 2010, compared with an 8% rise to 1.26 million cars at Mercedes-Benz. Sales of luxury cars have been largely unaffected by swirling economic concerns in recent months as demand, especially in China and the U.S., remains robust.

Audi reiterated that it expects to grow faster than the 4% growth anticipated for the global car market in 2012 and it is nearing a decision about where to produce cars in North America. Sales in January and February rose 8% on the year to more than 200,000 cars.

Eager to dethrone BMW as the world's largest luxury auto maker, Audi aims to start production in the U.S. or Mexico as soon as 2015 to broaden its global footprint. Audi's strong growth in recent years has been mainly driven by demand in China and Europe, but it still lags its German peers in terms of U.S. sales volume.

Last week, parent company Volkswagen reported a sharp increase in profits for 2011 as it sold more than 8 million cars and trucks for the first time. But calculated figures showed a drop in operating profit for the fourth quarter amid ramp-up costs for new technology and signs that the company is suffering from the economic woes in Europe.

Audi has been Volkswagen's largest earnings contributor in recent years.