Will Audi Brand See Top Line Growth In 2019?

by Trefis Team
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Volkswagen AG
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Yes, Audi’s Top line is expected to grow by 1.7% in 2019. Audi brand is owned by Volkswagen AG (OTCMKTS: VWAGY) which develops vehicles and components for the Group’s brands, but also produces and sells vehicles, in particular passenger cars and light commercial vehicles. In this note we discuss how the Audi brand’s volumes have fluctuated in the recent quarters. Please visit our interactive dashboard – Audi Volumes: Why are Audi Sales Volumes fluctuating? for more information.

 

What happened?

Audi’s sales volume has been fluctuating over the past few quarters.

Sales volume rose to 418K in Q2 2018 but fell down to 295K in Q3 2018. The fluctuations continued and at the end of recently concluded Q3 2019 the volume of Audi’s sold was 268K (least in the last 9 quarters).

 

Why?

In 2018 there was a changeover to the new Worldwide Harmonized Light Vehicle Test Procedure (WLTP) based approval process for the vehicle fleet of all companies. In Europe, the new test procedure led to a downturn in sales and a loss of market share, particularly in the second half of the year. This also led to delays in delivering vehicles to customers.

The WLTP procedure (world harmonized light-duty vehicles test procedure) is a global, harmonized standard for determining the levels of pollutants, CO2 emissions, and fuel consumption of traditional and hybrid cars, as well as the range of fully electric vehicles.

In the Annual press conference the company said “Our complex portfolio meant that we were more seriously affected than our competitors. Not only that, our own preparations could also have been better. Audi was hit particularly hard.”

WLTP and global slowdown have continued to impact the brand’s sales in 2019 as Q3 2019 recorded the least sales in the last 9 quarters.

 

So What?

The fall in sales volume has affected the Top line of Volkswagen’s Revenue from the Audi brand. Revenue from the segment fell from $58.9 billion in 2017 to $57.7 billion in 2018. For more details please visit our interactive dashboard: Volkswagen Revenues.

In 2019 we expect the brand’s Top line to grow to $58.7 billion due to better pricing of the brand.

 

 

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