12 November 2018

Audi to lose its technik leadership?

There seems to some trouble ahead for Audi with its position in the VW Group and also its sales figures.

In the coming week, on November 16, Volkswagen CEO Herbert Diess will outline the group’s 10-year plan at a meeting of the German carmaker’s supervisory board. This is a change from the traditional VW Group five year plan and perhaps heralds a new management approach.

Some inside sources have said that the main thrust of the policy changes to be announced will be that the generous budgets given the Group’s technical powerhouse, Audi, will be cut quite severely.

These industry insiders point to this as a reaction to the position of Audi as the tech leader of the Group and thus, the likely source of the sophisticated engine management systems that might have been responsible for differing diesel engine performance in all the Group’s vehicles...

With the rapidly accelerating move from diesel to petrol engines, as evidenced by Jaguar Land Rover’s scramble to change its fleet profile from 90% diesel-engined to more petrol power, and the inevitability of electric and ultimately fuel cell vehicles becoming much more a reality than the novelty or niche products they have been, this move could be seen as designed to sideline Audi’s technical leadership.

All OEMs are becoming increasingly open to technical and production joint ventures as evidenced by Mercedes-Benz and Nissan’s pickup venture to name but one and it would make sense for the VW Group to collaborate with another major vehicle maker - much larger than Audi - on the costly development of EVs, fuel cell vehicles, and of course connected and autonomous technologies. To get an idea of how much the Group has invested in these areas, it spent $13.1 billion on EV and connected vehicle technology in 2017. Added to the the possible scaling back of Audi’s technical leadership comes the news that the brand’s sales have taken a considerable hit in the last few months, with challenges such as the WLTP test procedures causing a 52.7% drop in sales in October in Europe and a fall of nearly 15% in North America, both compared to the same month in 2017.

While Audi may be seen as a premium performance within the Group, I feel it would be a big mistake for Herbert Diess and his board to turn their back on the undoubted technical brilliance of a brand that brought us the first production four-wheel-drive performance cars, the first really practical turbocharged engines and cutting-edge aluminium vehicle technology. The automotive world wants and deserves to see more Vorsprung Durch Technik, not less.

Simon Duval Smith

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