Audi plans to double Russia sales by 2015 image

Luxury auto maker Audi AG plans to almost double sales in Russia by 2015 despite the current steep market downturn, highlighting the trend among auto makers to tap emerging markets for future growth.

Sales in Russia are expected to come in around 30,000 cars in 2015 after about 16,500 this year, Audi executive board member responsible for sales and marketing, Peter Schwarzenbauer, said in an interview.

Audi is the premium brand of Volkswagen AG, Europe’s largest auto maker by sales, and has been the group’s biggest earnings contributor in the first nine months of 2009.

Russia appeared on track to surpass Germany as Europe’s largest single car market, but demand for cars contracted sharply when credit markets turned sour amid the financial crisis.

According to Russia’s Association of European Businesses, domestic car and light commercial vehicle sales slumped 51% on the year in the January-to-September period to 1.11 million units. Audi posted a 13% decline compared to the same period last year–to 11,464 cars in Russia.

The so-called BRIC countries Brazil, Russia, India and China are seen as crucial for growth in the auto industry in coming years and companies are pushing hard to ramp up their presence there.

Russia’s economy, however, has been battered by the global economic downturn and is recovering far more slowly than its peers in the BRIC group.

Schwarzenbauer said he expects the Indian market to exceed 3 million vehicles in 2015. India currently has a market volume of around 1.3 million vehicles per year.

Audi’s sales in India are on track to come in at 1,650 cars this year and are poised to rise to more than 2,000 in 2010, Schwarzenbauer said.

He noted that the number of potential luxury car buyers in India is growing, but that infracture and the quality of the roads still represent obstacles for stronger growth in the country’s premium segment.

Schwarzenbauer said Audi’s sales in Brazil are on track to come in at around 2,300 cars in 2009. Sales in Brazil might reach 5,000 cars in 2013 already, earlier than 2015 as initially planned, he said.

He said Audi’s brand image in Brazil is often still focused on the A3 hatchback, currently its entry-level model, but efforts to improve the awareness for the company’s entire product line-up are ongoing.

Audi started to produce A3 models locally in Brazil in 1999, but ceased production in 2006 as sales volumes didn’t live up to expectations.

Thanks to an early market entry of parent Volkswagen, Audi is the best-selling luxury brand in China, by far the largest of the BRIC markets.

In terms of global luxury sales Audi still ranks third behind BMW AG and Daimler AG’s Mercedes-Benz brand. But it has been narrowing the gap during the industry crisis, mainly due to its relatively small exposure to the troubled U.S. market and its large footprint in China.

Schwarzenbauer said last week that Audi will significantly exceed its target of 130,000 car sales in China this year and expects the country to outpace its German home turf as its largest single market in 2012 or 2013 at the latest.

Annual sales in China might soar to 250,000 cars by 2012 or 2013 as Audi is preparing for the launch of several new or revamped models, is ramping up local production and expanding its dealership network.

Source: Dow Jones