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2000 Annual Report
Audi Group
Key Figures
31 Dec. 20001 31 Dec. 1999 Change in %
Production Cars 650,850 626,059 4.0Engines 1,187,666 1,266,896 –6.3
Vehicle sales Cars 919,621 634,973 44.8Audi 653,404 634,708 2.9
Western Europe 500,654 519,141 –3.6of which Germany 239,644 257,642 –7.0
Rest of world 152,750 115,567 32.2
Lamborghini 296 265 11.7
Other Volkswagen Group brands 265,921 – –
Sales revenues DM million 39,024 29,624 31.7EUR million 19,953 15,146
Earnings before taxes DM million 1,605 1,640 –2.1EUR million 821 839
Net earnings DM million 859 634 35.5EUR million 439 324
Sales return before taxes % 4.1 5.5
Balance sheet total DM million 15,078 13,110 15.0EUR million 7,709 6,703
Equity ratio % 23.2 21.5
Capital investments DM million 3,965 2,966 33.7EUR million 2,027 1,516
Depreciation DM million 2,251 1,847 21.9EUR million 1,151 945
Cash flow DM million 2,876 2,274 26.5EUR million 1,471 1,163
Employees Average 49,396 45,800 7.9
1 Figures including AUTOGERMA S.p.A. following its incorporation into Automobili Lamborghini Holding S.p.A.
Audi Forum Ingolstadt
The company opened a new flagship facility in Decem-ber 2000: the Audi Forum Ingolstadt. With its modernarchitecture and wide range of services, this is a micro-cosm of the Audi brand.
Visitors can obtain information on the facilities ofthe Audi Forum Ingolstadt and, if required, directionsfrom the information pavilion at the entrance. Next to it is the museum mobile, a tall circular building that isvisible from afar. This unconventional car museum isthe principal attraction at the Audi Forum Ingolstadt.
The Customer Center, with the striking Audi hangararchitecture, is where customers come to collect theirnew Audi in person. This is also the starting point ofour factory tours. The central reception is located in the link building between the museum mobile and theCustomer Center. This is where you can register for a fac-tory tour, for instance. The building also houses variousMövenpick catering establishments which treat custom-ers to exquisite cuisine.
Our latest models are on display in the “Market andCustomer” building opposite. A variety of services, suchas a bank, insurance agency and travel agent, are alsohoused here for your convenience.
The piazza is the central area of the Audi ForumIngolstadt. It offers plenty of space for automotive andcultural events. Visitors can wind down and enjoy theambience on the adjoining piazzetta, with its greeneryand fountains.
We look forward to welcoming you to the Audi ForumIngolstadt!
Foreword 4Report of the Supervisory Board 6
Products 10
Technology, People and NatureTechnology and Innovations 28quattro 30Motor Sport 31Purchasing 32Employees 33Environmental Protection 36
Presenting the Company in IngolstadtAudi Forum Ingolstadt 40museum mobile 42
Markets and CustomersMarketing and Service 46Market News 48Cultural and Sports Sponsorship 53
Audi Group FinancesManagement Report 56Finance 66Audi Shares 73Balance Sheet 74Statement of Earnings 75Notes 76
Development of Fixed Assets 76Notes to the Balance Sheet 80Notes to the Statement of Earnings 85Segment Reports 88Other Particulars 89
Independent Auditors’ Report 92
Audi Group in Figures 93
Contents
Audi is an internationally renowned manufacturer of high-quality cars. Our success hasbeen achieved through creativity, commitment and the ability to generate enthusiasm.
The wishes and emotions of our customers are the guiding principle behind our everyaction. We strive to lead the way in the field of innovation. We aim to establish newstandards to substantiate our brand claim of “Vorsprung durch Technik”.
Audi further strengthened and consolidated its positionon markets worldwide during 2000, even though thecontext within which we have been enjoying sustainedsuccess has become more difficult on certain markets.For the seventh successive occasion we concluded the financial year with new record vehicle sales andrevenues. We recorded our highest ever sales total ofDM 39 billion in 2000, and sold almost 920,000 vehicles.This figure includes around 266,000 vehicles of otherVolkswagen Group brands sold by the Italian importerAUTOGERMA S.p.A., which was consolidated withinAudi for the first time.
The success of our cars in Germany, Europe, the USAand Asia suitably confirms that we have responded ac-curately to current market trends by supplying the rightblend of continuity and innovation. Various surveys andconversations that I have held with individuals haveserved to confirm that our brand is a very attractiveone. High esteem for the technical and aesthetic quali-ties of our vehicles is all part of its appeal.
Success on the one hand confirms to us that ourentrepreneurial strategy is correct. On the other hand, it motivates and obliges us to continue down the samepath, for the sake of our customers and employees.This is the reason why we are making such huge capitalinvestments; during the past year, we spent a total ofDM 4 billion on our future.
We established a very special landmark in the carindustry during 2000 with the launch of the Audi A2:this car, which is the first volume-production aluminium-bodied vehicle, makes systematic use of advanced tech-nology in preserving natural resources and protectingthe environment. The combined qualities of the A2 en-able it to perform a pilot function in shaping the futureof mobility.
The Audi A8 version with eight-cylinder TDI engine,also launched during 2000, demonstrates at the otherend of our product spectrum how we have successfullybrought together our expertise in the fields of light-weight design, TDI technology and permanent four-wheel drive to create a luxury-class car that is inter-nationally unique.
The appeal of our products and the strength of ourmarket position are founded on the ability to reconcileseeming contradictions: low weight and a high level of safety, suitability for both motorway driving and off-road use, spacious interiors and minimum fuel con-sumption. Our customers know that they can expect asynthesis of ideas rather than any compromise solutionfrom Audi: on the strength of this product profile, wefor example advanced to the status of European marketleader in 2000 for cars with four-wheel drive.
The new Audi A4 saloon, which we launched at theend of last year, has garnered lavish praise from bothcustomers and the trade press in its intensely competi-tive segment. In the light of the widespread positiveresponse to the new A4, we are very confident that thismodel series will continue to be the mainstay of oursuccess.
Our current product range places the emphasis morethan ever before on advanced technology and pioneer-ing design. Our products, our ability to innovate, a mo-tivated workforce and satisfied customers provide asound basis for our success.
I take this opportunity to extend my sincere thanksto all those who have made these achievements pos-sible and who are contributing towards our continuingsuccess.
Ingolstadt, March 14, 2001
4 Foreword
Dr.-Ing. Franz-Josef Paefgen, Chairman of the Board of Management
Dipl.-Ing. Erich Schmitt, Purchasing
Dr. h. c. Andreas Schleef, Human Resources
Dipl.-Ing. Dipl.-Wirtsch.-Ing. Peter Abele, Finance and Organisation
Dr. jur. Georg Flandorfer, Marketing and Sales
Dr. rer. pol. Jochem Heizmann, Production
Dr.-Ing. Werner Mischke, Technical Development
Members of the Board of Management
Audi brought the year 2000 to a successful conclusion.The objectives were achieved, even if developmentswere not satisfactory in all markets. In Germany in par-ticular, vehicle sales were adversely affected by thegenerally slack state of the market. Rising sales in othermarkets, however, more than compensated for this.
The Supervisory Board would like to thank the com-pany’s employees, the elected representatives of theworkforce and the Board of Management for their dedi-cation and hard work. They all contributed in differentways towards last year’s good result.
In the year under review the Supervisory Board wasagain able to form a detailed picture of the situation of the Audi Group, its business progress and marketdevelopments from the extensive quarterly reports sub-mitted to it and its quarterly meetings. The presidingcommittee met before each meeting of the SupervisoryBoard. The Supervisory Board monitored and advisedthe company’s management over and above the extentrequired by law. Particular attention was paid to the riskmanagement measures of AUDI AG and of its principalshareholdings.
The Board of Management kept the SupervisoryBoard informed about financial and human resourcesplans for the coming five years. It also provided an in-sight into the current and scheduled product range,and into forthcoming technical innovations. The Super-visory Board discussed and ratified the investment planup to 2005.
The Supervisory Board approved the acquisition ofAUTOGERMA S.p.A. by Automobili Lamborghini HoldingS.p.A. Now that the former has been incorporated intothe Audi Group, Audi supplies vehicles of other Volks-wagen Group brands in Italy alongside its own brands.
At the Annual General Meeting on June 29, 2000 theshareholders elected PwC Deutsche Revision Aktien-gesellschaft Wirtschaftsprüfungsgesellschaft, Hanover,as the auditors for the 2000 financial year. The Super-visory Board commissioned the auditors with the taskof auditing the Consolidated Financial Statements ofthe Audi Group and the Annual Financial Statements of AUDI AG. Both sets of accounts, together with theManagement Report for the Audi Group and AUDI AG,have received the unqualified certification of the audi-tors. The findings of the audit and the corresponding
6 Report of the Supervisory Board
Dr. Robert Büchelhofer, Chairman of the Supervisory Board
documents were distributed to members of the Super-visory Board. The auditors reported on the principalfindings of the audit at the Supervisory Board’s meet-ing on March 14, 2001. For its part, the SupervisoryBoard examined both sets of accounts, together withthe Management Report. It ratified the Consolidatedand Annual Financial Statements of AUDI AG, as well asthe Management Report, which are thus established inaccordance with § 172 of German Stock CorporationLaw.
Last year saw the following changes on the Board ofManagement and Supervisory Board: with effect fromDecember 31, 2000 Jürgen Gebhardt, Member of theBoard of Management of AUDI AG for Production, leftthe company at his own request. The Supervisory Boardextends its thanks to Mr. Gebhardt for his dedicationand personal commitment.
Dr. Jochem Heizmann was appointed Member of theBoard of Management for Production with effect fromFebruary 1, 2001.
After 22 years on the Supervisory Board, TheoSchirmer, employees’ representative and Chairman of theWorks Council of AUDI AG, Neckarsulm plant, surren-dered office with effect from June 30, 2000. The Super-visory Board is deeply grateful and indebted to Mr.Schirmer for his many years of active and loyal service.Heinz Eyer, member of the Works Council of AUDI AG,Neckarsulm plant, was appointed his successor by theLocal Court of Ingolstadt, upon the application of theBoard of Management, with effect from July 1, 2000.
The Audi Forum Ingolstadt, opened at the end of last year, allows Audi to project itself in a new light. Inaddition to presenting the brand universe of Audi, thehistory of the brand as well as that of its predecessorsis juxtaposed with the future and visions of the present-day company. The Supervisory Board is convinced thatAudi will continue to bring attractive products and pio-neering innovations onto the market. We are eager totake on the challenges of the future together with thecompany’s management and employees.
Ingolstadt, March 14, 2000
Supervisory Board1
Dr. Robert Büchelhofer Chairman2
Shareholders’ representative
Xaver Meier Deputy Chairman2
Employees’ representative
Bruno Adelt Shareholders’ representative
Senator h.c. Helmut Aurenz Shareholders’ representative
Helmut Dotzauer Employees’ representative
Heinz Eyer Employees’ representative
Dr. rer. pol. Thomas R. Fischer Shareholders’ representative
Wolfgang Förster Employees’ representative
Dr. h.c. Peter Hartz Shareholders’ representative
Dr. jur. Claus Helbig Shareholders’ representative
Dr.-Ing. E.h. Hans-Olaf Henkel Shareholders’ representative
Johann Horn Employees’ representative
Berthold Huber Employees’ representative2
Norbert Kniselies Employees’ representative
Dr. jur. Jens Neumann Shareholders’ representative2
Dr. tech. h.c. Dipl.-Ing. ETH Ferdinand Piëch Shareholders’ representative
Richard Polzmacher Employees’ representative
Norbert Rank Employees’ representative
Dr. rer. pol. Axel Freiherr von Ruedorffer Shareholders’ representative
Max Wäcker Employees’ representative
Dr. rer. pol. Carl H. Hahn Honorary Chairman
1 The profession and company of the members of the SupervisoryBoard, together with their membership of other supervisory boards and regulatory bodies, are indicated in the Notes to the FinancialStatements of AUDI AG.
2 Member of the presiding committee and the negotiating committee
Report of the Supervisory Board 7
Exceptional places inspireexceptional ideas.
A genuine AudiThe new Audi A4 celebrated a sensational public débutat the Berlin aaa 2000 exhibition. Even at first glance itis obvious that the new generation is a “genuine” Audi.By using clear, precise forms, Audi places the emphasison pioneering design rather than on fleeting trends.Well-defined lines and striking design elements capti-vate the onlooker from the moment they set eyes onthis car.
By sheer definition enjoyable to driveThe dynamic allure of the A4’s design is underscored by its range of high-performance engines. These powerunits incorporate a broad spectrum of high-torque, con-sumption-optimised petrol and TDI versions. The range-topping engine is an ultramodern V6 3.0 litre enginewith an output of 162 kW. For the first time in its class,the new A4 is available with multitronic, the continuouslyvariable automatic transmission, as an optional extra for all front-wheel-drive versions. The A4 2.5 TDI quattrowill please the many drivers of diesel cars who havebeen longing for a sporty four-wheel-drive version.
More is betterA more spacious interior was one of the requirementsthat the new Audi A4 had to meet. A 33 millimetre long-er wheelbase and a passenger compartment that islarger in every direction were the solution. The new A4offers significantly more space to move at head, shoul-der and elbow level, and rear passengers will appreciatethe extra 43 millimetres of knee room. The luggage com-partment, with a capacity of 445 litres, is above-averagefor its class.
The Complete Car – the new Audi A4
Safety comes firstSafety is also an overriding priority in this model gener-ation. The Electronic Stability Program in the new A4comes with a brake assist system that intervenes in anemergency to reduce the stopping distance – fractionsof a second and vital metres that could save lives. Evenif a collision does occur, the standard-fit Sideguardairbag system reduces the risk of injury to the headand neck.
Always abreast of new developmentsThe standard specification of the new A4 already leavesthe customer wanting for little: diverse combinations ofmaterials and colours pave the way for a high degree ofindividual character. The automatic air conditioning withsun sensor can be adjusted separately for the driver’sand front passenger’s sides. All A4 cars are equippedwith sporty alloy wheels. And the range of optional ex-tras is remarkably extensive for a car of this class: forexample, customers can order Audi telematics, to helpthem get to their destination more swiftly and safely.Various versions of this system are available, with fea-tures ranging from emergency and service call func-tions and the latest traffic reports to “dynamic routeguidance”: this latter concept means that the navigationsystem Plus uses all relevant traffic information to directthe driver automatically along the fastest route.
10 Products
German industry’s award for innovationAnyone looking for an example of supreme technologyand having a keen awareness of social responsibilitywill find its ideal manifestation in the Audi A2. The firstvolume-built aluminium vehicle has what it takes toachieve low fuel consumption: lightweight constructionand outstanding aerodynamics. The all-aluminium bodyis 43 percent lighter than a corresponding steel structure;the pronounced teardrop shape keeps the Audi A2’sdrag coefficient very low. It is no coincidence that it hasreceived the distinction of German industry’s award forinnovation.
ADAC: “Superb stability in a crash situation”Despite its light weight, you feel amply protected insidethe A2. The high-strength Audi Space Frame ASF sur-rounds the occupants like a protective cage, and is veryeffective at dissipating impact energy. This was alsoconfirmed in the ADAC crash test, in which the Audi A2performed excellently.
Lighter, more economical, more intelligent – the Audi A2
Two-tier floor: the Space Floor ConceptFor all its compact exterior dimensions, the A2 has anastonishingly spacious interior. The Space Floor Conceptguarantees that rear passengers can adopt an ergo-nomically correct posture. The secret is the floor, whichis lower in the rear footwells, allowing occupants to an-gle their legs in an entirely natural manner for a relaxedseated position. Each of the rear seats can be foldeddown into one of two positions in just a few easy opera-tions, or removed altogether. This makes the Audi A2’sinterior truly multifunctional.
Big interior, small fuel billThe “flyweight” member of its class demonstrates out-standing acceleration and flexibility. There are three en-gine versions to choose from: a high-torque TDI versionand a low-pollution four-cylinder petrol engine, eachdeveloping 55 kW from a capacity of 1.4 litres. Finally,Audi unveiled the world’s first five-door, three-litre car inspring 2001; this 1.2 TDI version has an output of 45 kW.
12 Products
Even better looking and more fun to driveThe A3 received a major update last year. The existingengine versions were optimised in terms of fuel con-sumption and emissions. The careful modifications tothe widely acclaimed design of this compact-class carserved the purpose of accentuating its sports appealand sophistication. The contours of the radiator grilleare now more pronounced, the headlights and rearlights have a modified design and the interior has beenrefined.
Efficient diesel with sporting ambitions: the Audi A3 1.9 TDIThe most important changes are hidden away in theengine compartment. Two high-tech power units nowround off the A3 model line: an economical, ultra low-emission 1.6 litre petrol engine developing 75 kW, and a1.9 litre TDI version generating 96 kW. The high-torque96 kW TDI transforms diesel driving into a form of sport-ing activity. Acceleration and top speed speak for them-selves: 100 km/h in 9.2 seconds and a top speed of
A new perspective – the Audi A3
205 km/h. For all its dynamic constitution, the A3 1.9 TDIis remarkably economical to run.
The front-wheel-drive version with the new 1.9 TDIengine can also be supplied with a five-speed tiptronictransmission, resulting in an extraordinary combinationof comfort and sports performance.
Even more arguments in favour of the Audi A3Since making its market début, the Audi A3 has won thehearts of over half a million buyers. Careful refinement,improved standards of materials and workmanship,design modifications and exclusive optional extras haveserved to make it even more attractive and dynamic. Itsexemplary safety has been enhanced with the inclusionof the ESP stability program as a standard feature.
Products 13
Getting the priorities rightA spacious interior and elegant outlines are the defin-ing features of the Audi A6. It has all the aura of a largesaloon car, without being a slave to convention. Quality,whether on the inside or outside, is the top priority:everything from the fully galvanised body to the exclu-sive leather options for the seats reflects its calibre.With its distinctive design and ruthless attention todetail, it has established itself as one of the leaders ofits market segment.
Quality with substanceThe electronically controlled multitronic transmissionhas proven exceptionally popular on the Audi A6 2.8.Reason enough for us to make this revolutionary con-tinuously variable transmission also available on theAudi A6 2.4 and Audi A6 1.8 T. The added convenienceof this electronically controlled transmission has provena boon on these engine versions. The power is trans-mitted smoothly and efficiently, with no trace of gear-shift jolt.
Personality with style – the Audi A6
And those who believe that such a gain in comfortand convenience will inevitably come at the expense offuel economy and vigour are in for a surprise: comparedwith a conventional torque-converter transmission, themultitronic is both more economical and more agile.
14 Products
Cruising serenely – the Audi A8 3.3 TDIThe Audi A8 has pioneered revolutionary innovations in the production of all-aluminium vehicle bodies, atechnology that is now finding use in volume produc-tion in the shape of the new Audi A2. The reasons forits success are obvious: lightweight material and highstrength bring together high performance and economy,comfort and ecological compatibility. To match the highexpectations of our customers, the A8 model range was again extended last year. The new A8 with V8 TDIengine, with a displacement of 3.3 litres, combines out-standing performance figures with low fuel consump-tion. In conjunction with the five-speed tiptronic, theAudi A8 3.3 TDI quattro moves along with supremesmoothness.
Exclusive twelve-cylinder car –the Audi A8 L 6.0 quattroThe new version of the Audi A8, which will be arrivingon the market in summer 2001, represents not only ourentry into the twelve-cylinder class, but also secures
Living up to high expectations – the Audi A8
us an exceptional position there: thanks to the engine’sspace-saving W configuration, this will be the firsttwelve-cylinder front-engined car to have permanentfour-wheel drive. The engine is notable not only for itsoutstanding performance, but also for its smooth, re-fined characteristics. This makes the long-wheelbaseversion, with its extra space in the rear area, an evenmore luxurious saloon car.
Products 15
Success that speaks volumesThe high demand for the two TT models during 2000impressively reflects their popularity. The Audi TT toppedthe registration statistics in Western Europe for its classof sports car. The offer to retrofit the Electronic StabilityProgram ESP on Audi plant premises, in response to thequestions raised about its handling, has been receivedvery positively by our customers. The campaign in Ger-many was brought to a successful conclusion at theend of the year.
The Audi TT CoupéThe Audi TT Coupé is a unique combination of puristdesign and advanced technology. It is moreover notablefor its outstanding drag coefficient and low fuel con-sumption. The Audi TT Coupé is available in three vari-ants: with front-wheel drive and 132 kW engine, or as a quattro, with a choice of a 132 kW or 165 kW engine.The latter accelerates from 0 to 100 km/h in a mere 6.6 seconds.
Form follows emotion – the Audi TT
16 Products
The Audi TT RoadsterThe Audi TT Roadster is the key to unlimited freedom.As in the Coupé, attention has been paid to even themost minute detail in its driving area. The steering wheeland fittings are adorned with matt-lustre aluminium,and the pedals and footrest have stainless steel trims.The distinctive leather package Authentic is available asan option: it is remarkable for its very high-quality finishand stylistic details, such as the visible moccasin seam.The high-strength aluminium rollover bars and the op-tion of an electrically retracted glass wind deflector areother eye-catching features. In addition to the enginesoffered for the Audi TT Coupé, a 110 kW engine versionin combination with front-wheel drive was introduced atthe start of 2001 for the Roadster. Another new optionis the hardtop with heated rear window and exclusivefabric lining. The roof, based on an aluminium spaceframe structure and with plastic outer panelling, pro-vides very effective acoustic insulation and acts as anefficient form of thermal insulation.
Products 17
The true connoisseur savours and enthusesThe arresting “S” symbol identifies our sportiest andmost powerful models. Those who know and appreciatethem treat them with the discreet respect of the con-noisseur, rather than the urge to show off. All S modelshave permanent four-wheel drive and an additionaldose of sporting flair: lower suspension, exceptionalperformance potential, firm suspension and damping,and optical highlights such as Avus-design cast alloywheels and forged aluminium door mirrors.
Left, right, left!Four-wheel drive proves particularly beneficial in con-junction with high-performance engines, because themore powerful the engine, the more important the wayits power is transmitted to the road. Superior tractionmakes a critical difference all the time, not just onbends. The firm sports suspension settings ensure thatS models remain safely on course even when acceler-ated hard and when driving on poor roads.
Our statement on understatement – the S models
Sports appeal that suits every tasteAudi supplies a supremely sporty version for every mar-ket segment, with a range extending from the S3 to theS8. The dynamic performance of the Audi S3 (154 kW) isin itself awesome: the 1.8 litre four-cylinder turbo engineresponds spontaneously to a mere touch of the acceler-ator, and delivers substantial torque right across theengine speed range.
In the Audi S4 Avant (195 kW), the V6 2.7 litre biturboengine demonstrates that acceleration need not be a tour de force. Its two turbochargers respond sponta-neously, supplying high torque at low-end speeds.
The Audi S6 (250 kW) occupies a special place in itsmarket segment: it is available as both a saloon and an Avant. The Audi S8 (265 kW) is equally exceptional:the deluxe saloon can be supplied as an automatic, foradded convenience, or with a precision-action six-speedmanual gearbox.
18 Products
High performance from quattro GmbHIn summer 2000, Audi launched an astonishingly power-ful vehicle that caused huge ripples of excitement. TheRS 4, created by the AUDI AG subsidiary quattro GmbH,is a high-performance vehicle that is unequivocallysporty in both its technical constitution and its appear-ance. This deluxe Avant, brimming with 280 kW of power,offers a quite exceptional combination of features: theV6 biturbo engine, permanent four-wheel drive, sportysix-speed manual gearbox, precision-tuned suspension –and of course ample interior space.
The ultimate sports AvantThe Audi RS 4 shows its true strengths where othersreach their limit: at the limits of cornering stability,whether on dry or wet roads. Take to the wheel, and you soon realise why the trade press dubbed the RS 4 a“rocket-powered estate”: it accelerates from 0 to 100 km/hin a blistering 4.9 seconds. The design of this exception-al vehicle – both inside and out – unmistakably signalsits performance.
Unconditionally sporty – the Audi RS 4
20 Products
All-terrain vehicle or classic estate car?This is a decision that customers need no longer make:the allroad quattro, launched last year, is both. It offersthe luxury of a full-size car for long-distance driving,and its tractive power comes into its own on difficultterrain. These qualities are made possible by high-performance technology: permanent four-wheel drive,the intelligent air suspension system with four adjust-ment levels, and specially designed tyres.
The right approachOvercoming problems means responding flexibly tonew challenges. The allroad quattro does not have fixed-level suspension; its ground clearance is adjusted pre-cisely in line with the driving conditions. On difficultterrain, the driver can raise the vehicle’s height succes-sively; after returning to the road, the allroad quattroautomatically lowers the suspension by up to 6.6 cm,depending on its driving speed.
Transcending limits – the Audi allroad quattro
The makings of a top multi-discipline athleteThe engine of this on-and-off road vehicle is as exclusiveas the vehicle concept itself. There are two V6 versionsto choose from: a 184 kW 2.7 litre biturbo, and a V6 TDIdeveloping 132 kW. The allroad quattro masters verysteep gradients and can tow loads of 2.3 tonnes.
Products 21
An Italian legend – the Lamborghini Diablo
With infinite attention to detailVery few sports cars possess such exceptional mystiqueas the Lamborghini Diablo. The small provincial town of Sant’Agata, between Modena and Bologna, is whereLamborghini’s dedicated technical experts build the carwhich so many people dream of owning. Anyone whohas witnessed the meticulous craftsmanship that goesinto the Diablo will understand the passion that this carembodies. The model sporting the badge with the bullwas made both more powerful and more luxurious lastyear. With a new 6.0 litre V12 engine developing 405 kWand the ability to accelerate from 0 to 100 km/h in lessthan four seconds, the Lamborghini Diablo 6.0 is thelast word in auto manufacturing. Other performancedata are also more than impressive: the sports car withfour-wheel drive achieves its maximum torque of 620 Nmat 5500 rpm, and is capable of a top speed of 330 km/h.The engine’s sound is an initial indication of the forcesthat are at work: all the legacy of immense technicalinput.
Lamborghini lightweight designThanks to Lamborghini’s exceptional know-how in thedevelopment of composite materials, most body partsof the Diablo 6.0 are made of carbon fibre – a particu-larly lightweight, strong material. The whole interior ofthe Lamborghini Diablo 6.0 is lined in leather. This, incombination with components in carbon fibre and alu-minium, gives it a luxurious sports style.
Products 23
quattro GmbH – because every person is an individualThe expertise of quattro GmbH has been underlinedboth in the field of vehicle development – with the re-cent launch of the RS 4 – and with its separate range of products, lifestyle articles and accessories. These gofar beyond the regular AUDI AG equipment range andreflect the preferences of customers who attach par-ticular importance to exclusivity, individuality and sportsappeal. Virtually every customer request can be satis-fied: custom vehicles using exclusive materials, sportyinterior and suspension packages, alloy wheels, specialpaint finishes and built-in state-of-the-art communica-tions technology, as well as a regularly updated rangeof high-quality clothing and luggage, leather items,watches, sunglasses and other lifestyle articles. Andbecause sports appeal should not be restricted to theworld of the car, quattro GmbH has also created premiumbikes for active leisure use.
Cars and more …
High-tech pump-injector units from HungarySeries production of a new generation of diesel engineswith pump-injector fuel injection commenced in July2000 at AUDI HUNGARIA MOTOR Kft., in the Hungariancity of Györ. The new technology is used for instance inthe 96 kW TDI engine for the Audi A3. On this system,the fuel pump and injector form a unit located directlyabove the cylinder. The line normally connecting thepump and injector is no longer required. This permitsextremely high injection pressures in excess of 2,000bar, which keep the combustion process particularlyefficient and clean. High injection pressures can beequated with high torque, low fuel consumption andlow emissions. For the customer, this above all meansone thing: significantly higher torque that is the key tomore driving pleasure – and all this without inflatingfuel consumption or increasing environmental pollution.
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Biturbo power from 2.7 litresCosworth Technology’s expertise was used in modify-ing the 2.7 litre biturbo engine from the Audi S4 inpreparation for its use in the RS 4. The cylinder headsare cast at Worcester, Great Britain, using a patentedaluminium engine casting method, and final assemblyof the engines is carried out at Wellingborough, GreatBritain. Production there was stepped up at the start ofthis year, to keep up with the continuing high demand.
The engine blocks for the V6 3.0 litre engine, whichis available on the new Audi A4, are likewise cast at theWorcester plant.
Prevention to minimise repairsCosworth Technology, Inc., USA, has developed a revo-lutionary “black box” for the transport industry. A varietyof sensors in the i3000 register a range of data, fromthe load on the engine to how many times a passengerdoor is opened. This technology permits the diagnosisof latent faults before they become a major problem.This means vehicles spend less time out of action, andtransport companies can reduce their spares inventory.This new product was recently launched on the USmarket and has generated considerable interest world-wide.
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Multi-faceted problems are bestsolved with multi-faceted ideas.
Centre of excellence for advanced technologyIn April last year, the “New Audi Toolshop” was openedat the Ingolstadt plant. Audi invested around 120 millionmarks in this project. With the aid of ultramodern com-puter technology, this “company within a company”produces tools and facilities for body manufacturingboth for Audi and for external customers. Audi achievesthe optimum balance of preferred design and technicalfeasibility for its customers.
Expertise in aluminiumA wealth of experience and a command of special tech-nologies are key factors behind the success of the AudiGroup. Audi has been a pioneer of the use of aluminiumin body manufacturing since the mid-1990s. The use ofthis lightweight material necessitates the developmentof new materials and processing concepts, surfacetechnologies and joining techniques. Quality Assurance,with its new “Aluminium/Bodyshell” centre of excellence,is underpinning these developments and has thus madea significant contribution towards the success of the all-aluminium construction technique in series production.This achievement has won acclaim both in Germanyand elsewhere: the Audi A2 enjoyed the distinction ofwinning both German industry’s award for innovationand the European Aluminium Award in 2000.
Modern communication made easyWith their increasing number and complexity of func-tions, modern vehicles are being pushed to the verylimits of user friendliness. The networking of the soft-ware for individual components such as the telephone,telematics, Internet access, sound and navigation sys-tems is therefore one of our principal developmentareas in the field of electronics. We want our customersto find their vehicle easy to operate and to have accessto a full range of information sources. Audi’s latestscreen-based navigation system is performing a pio-neering role in this market. Audi is moreover set to ac-quire a strong competitive position in future by launch-ing a new multimedia platform.
Test drives along virtual roadsTesting the ESP sensor technology and tracking downthe sources of “creaks and groans” in vehicles used toinvolve time-consuming, personnel-intensive test drivesthat could not begin until the regular assembly processhad been completed. Since mid-2000, Audi has beenconducting these tests on ESP/shaker rigs that are inte-grated into the production lines. The way they functionis an absolute world first. The car is first driven on roll-ers equipped with steel plates that resemble a cobble-stone surface, and any extraneous noises identified.The test rig then simulates body movements duringcornering by tilting and turning the vehicle, so as to
Everyone’s talking about innovation. We’re practising it.
test the ESP sensor technology. These test rigs not onlyoperate with greater reliability and precision, they arealso swifter than the previous methods.
The shape of things to come?A futuristic design study was unveiled to the public atAutostadt in Wolfsburg: a sports car that establishesthe connection between the legendary Auto Union rac-ing car and contemporary Audi design. With its flowinglines and a monumental radiator grille, this vehicleplausibly visualises the technological potential of theAudi brand: lightweight design, sheer dynamism andfunctional precision.
A second design study, the Steppenwolf, was one of the highlights of the 2000 Paris Motor Show. Thissynthesis of a roadster and all-terrain vehicle unitestop-class comfort, high utility and innovative technology.Following the successful launch of the Audi allroadquattro, it represents a progression of the on-and-offroader concept for the compact class.
Technology and Innovations 29
1980: the début of the quattroThe first Audi with permanent four-wheel drive wasunveiled at the 1980 Geneva Motor Show. 20 years on,Audi was able to celebrate the unique success story ofthe quattro concept: compared with conventional frontor rear-wheel drive, permanent four-wheel drive meansthat each individual wheel is always handling less pro-pulsive power but greater cornering force. This is thekey to its impressive cornering stability. The superiorityof this technology was fully evident from the start, withcountless wins and championship titles on rally cir-cuits and racetracks worldwide. Names such as MichèleMouton, Hannu Mikkola, Stig Blomqvist and Walter Röhrlare inseparably associated with the quattro’s mostmagnificent moments.
1982: series productionThe trade press acclaimed the decision to take thequattro into series production in 1982 as a “stroke ofgenius”. Since then, Audi has built over one millionquattro vehicles; at present, almost one-third of all mod-els built are ordered with permanent four-wheel drive.
20 years of quattro
A concept that was initially regarded as somethingof a technical curiosity on ordinary roads is now astandard option in the range of virtually every carmanufacturer. Audi, however, supplies easily the mostdiverse range of variants. This is hardly surprising,considering the superior technological and productionknow-how gleaned over two decades of building four-wheel-drive systems. A shining example of “Vorsprungdurch Technik”.
2000: the allroad quattroThe latest high point in the success story is the Audiallroad quattro. It was given its first public showing last March in Geneva, aptly enough the venue wherethe “original” quattro had made its début twenty yearsearlier. The public’s response to the new vehicle suit-ably demonstrates the unbroken appeal of the quattrolegend, as does the sustained high level of demand forquattro models.
30 quattro
1 – 2 – 3 at Le MansAudi added to its lengthy tradition of motor sportsuccess with a resounding triple victory in the Le Mans24 Hours.
Following its successful début in 1999, Audi achievedin 2000 what no other manufacturer had done before:the three Audi R8 cars which started the race securedthe first three positions on the grid, clocked up thefastest lap times and crossed the finishing line in uni-son ahead of the remaining field after 24 hours on thecircuit.
This achievement reawakened memories of AutoUnion’s legendary Silver Arrows from the 1930s. Thesenew-generation silver-bodied racing cars, built byAudi Sport and identified by the three colours of theGerman flag, crossed the finishing line shortly after4 pm on June 18, 2000. The 200,000 spectators lining theracetrack at Le Mans thus witnessed a perfectly stage-managed victory and an “all-Audi” winners’ rostrum.
It’s Audi … ahead of Audi … then Audi
An idea circles the worldBecause scarcely any other sporting occasion holds thepower to captivate such a large audience worldwide asthe Le Mans 24 Hours, the triumphant models also tookpart in the American Le Mans Series, with eight races inthe USA, one each in Canada, Great Britain and Germany,and the season’s final in Adelaide, Australia.
Audi clinched victory in the drivers’ championship in the America Le Mans Series before the end of theseries with a double victory in Las Vegas. The Audi SportNorth America team already had the constructors’ andteam titles sewn up after Laguna Seca. Audi likewisewon the final “Race of a Thousand Years” on New Year’sEve 2000 in Adelaide, with a convincing victory by acrocodile-look Audi R8 making the final race of theAmerican Le Mans Series a real highlight of the season.
AUDI AG will be maintaining its successful involve-ment in motor sport in the 2001 season, starting in theLe Mans 24 Hours and the American Le Mans Serieswith two refined Audi R8 sports racing cars.
Motor sport 31
Partnership with suppliers further intensifiedThe demand for highly innovative and individually speci-fied cars that must be supplied at short notice will con-tinue to rise. The challenge facing both Audi, the manu-facturer, and its suppliers is to harmonise the quality ofthe product and the process, and therefore overallreliability.
Last year 25 suppliers from both Germany and else-where were presented with the Audi Quality Award foroutstanding achievements, in recognition of the excep-tional standard to which they fulfilled our requirements.
Electronic marketplaceAudi is continuing to systematically develop the wayit works hand in hand with its suppliers. Our partnerswill assume product and process responsibility for theirrespective supply chains to an even greater extent thanhas previously been the case. This trend towards thesupplier taking on greater responsibility will continue.
Companies will become increasingly networked infuture as the e-business principle becomes better es-tablished. A worldwide digital supplier marketplace has
Hand in hand with suppliers
been set up for this purpose. The prospective applica-tions range from the publication of online catalogues toforms of trading such as auctions. 3,900 suppliers arealready connected up to our Electronic Supplier Link andtherefore connected online with both Audi and eachother. By implementing Internet technology, we are in-troducing increasing clarity and fluidity into internaland external processes. The entire value creation pro-cess is thus becoming much swifter and more efficient.
32 Purchasing
The standards are high …… because Audi customers are used to buying productsof excellent quality that are tailored to their own re-quirements. The high standard that is required of itsvehicles is satisfied not simply through ultramodern de-velopment and production techniques. It is much moreimportant that there is a clever mind behind every ma-chine and every desk, an individual capable of workingwith enthusiasm, a sense of responsibility and consid-erable expertise. The aim is to keep improving everyproduct. This is why Audi attaches particular importanceto a high standard of qualifications for its workforce.Merely a sound basic training is by no means adequate.Audi expects its employees to be prepared to keeplearning throughout their careers, and promotes thisthrough ongoing specialist and personal advancementmeasures.
… and will keep rising.Audi has expanded rapidly in recent years: between 1995and 2000, production rose from under 450,000 vehiclesto around 650,000. At the same time, the international
Outstanding products made by well-qualified employees
workforce has grown from just under 33,000 to almost51,000 at present. As a result of the rising standards ex-pected of employees, the proportion of skilled workersand graduates is steadily increasing. Yet Audi is ap-proaching certain limits of growth: regional labourmarkets have become depleted and it is consequentlybecoming increasingly difficult to satisfy the demandfor suitably qualified metalworkers and electricians atthe principal plants in Ingolstadt and Neckarsulm.
Audi has adopted a wide range of initiatives, for ex-ample holding training programmes for external appli-cants to prepare them for working on the productionline and as parts finishers. In conjunction with localemployment offices and agencies, skilled workers arein addition being recruited from other parts of thecountry where there is higher unemployment, to workin the two German plants. Audi is a popular choiceamong well-qualified skilled workers, though a frequentlack of mobility has previously stood in the way of over-coming the shortage of skilled labour to any significantextent.
Employees 33
Qualification structure of blue-collarworkers (AUDI AG)Average, ’000
blue-collar workers 24.4 26.0 27.9 29.3 31.7
of which skilled 14.8 16.0 17.6 18.9 20.9workers
30
20
10
1996 1997 1998 1999 2000
blue-collar workers of which skilled workers
Qualification structure of white-collar staff (AUDI AG)Average, ’000
white-collar staff 8.0 8.4 9.0 9.6 10.2
of which graduates 2.8 3.1 3.4 3.7 13.9
10
7.5
5
2.5
1996 1997 1998 1999 2000
white-collar staff of which graduates
Qualification structure of blue-collarworkers (AUDI AG)Average, ’000
blue-collar workers 24.4 26.0 27.9 29.3 31.7
of which skilled 14.8 16.0 17.6 18.9 20.9workers
30
20
10
1996 1997 1998 1999 2000
blue-collar workers of which skilled workers
Qualification structure of white-collar staff (AUDI AG)Average, ’000
white-collar staff 8.0 8.4 9.0 9.6 10.2
of which graduates 2.8 3.1 3.4 3.7 13.9
10
7.5
5
2.5
1996 1997 1998 1999 2000
white-collar staff of which graduates
Mitarbeiter (Audi Konzern)Durchschnitt in Tsd.
34,5 37,8 41,0 45,8 49,4
50
40
30
20
10
1996 1997 1998 1999 2000
Creativity also extends to vocational training …In this situation, Audi has made a virtue out of necessity:the company will gradually be stepping up the numberof apprenticeships from a current 1,400 to over 2,000 byadopting a new vocational training concept.
In addition to boosting the number of apprentices,the new concept systematically optimises the vocationaltraining being provided. This will permit a more rapidresponse to technical and organisational changes,more flexible occupational structures, more intensivein-house training and a deliberate policy of giving full-time employment to newly qualified skilled workers.
In response to the need for more practically orientedtraining, which is driven by operating circumstances andrequirements, “learning stations” have been established.The apprentices are supervised by specially trained per-sonnel – the station delegates – and integrated into op-erative procedures at an early stage. After successfullycompleting their final apprenticeship examination theyare transferred into one of the areas whose learningstation they have already passed through. This signifi-cantly reduces familiarisation times.
A new apprenticeship timetable is to be introducedfor the 2001 intake, in order to achieve the aims of thisconcept rapidly and economically. Staggered trainingtimes within the window of 6.00 am to 10.30 pm allowthe training facilities to be put to maximum use andmean that apprentices can be integrated better intoproduction procedures.
… and produces results.This new vocational training concept has three crucialadvantages, the most important being the superiorquality of the training provided. More young people canbe trained, and the shortage of qualified skilled workerscan be alleviated. Audi will thus be able to adhere tothe principle of recruiting people trained to a very highstandard, so that it can continue to supply its custom-ers with the excellent quality to which they are accus-tomed.
Employees 35
Employees (Audi Group)Average, ’000
34.5 37.8 41.0 45.8 49.4
50
40
30
20
10
1996 1997 1998 1999 2000
Structure of personnel costs(Audi Group) 4,972 4,481
Total, DM million
2000 1999
56.3 %Wages and salaries(compensation for services)
14.1 %Mandatory social securitycontributions
10.3 %
4.8 %
14.5 %Other welfare and supplementary contributions
55.9 %
14.6 %
10.0 %
5.1 %
14.4 %
Mandatory benefits and pay-ments for hours not workedPension contributions
Environmental protection knows no boundariesAudi regards the ecological probity of its operations asa declared corporate aim, and high priority is attachedto practising environmental protection in all processesat all production plants. To ensure that it does morethan merely pay lip service to environmental protection,Audi participates voluntarily in the European Communitysystem based on the EU Eco-Audit and ManagementScheme. Above and beyond fulfilling all the relevantenvironmental requirements, it lays down tougher stan-dards of environmental management. By systematicallyincorporating improvements into its industrial environ-mental protection measures, the Ingolstadt plant onceagain successfully participated in this system in 2000.
An environment-friendly infrastructureAudi has an established reputation for the responsibleuse of natural resources in the area of vehicle develop-ment. A less known fact is that it also pays particularattention to environmental protection in the designs of its buildings: for instance by using an ecologicallyacceptable component cooling system in the recentlycompleted “Market and Customer” building in Ingol-stadt, instead of conventional air conditioning. Cooledwater flows through pipes in the walls, cooling downthe interior in hot weather. This technique not only savesenergy; it also assures pleasant air quality. In addition,fully automatic sun sails reduce the extent to which thebuilding’s interior heats up. In the latest building projectat Ingolstadt – the museum mobile – the sun’s energyis converted via solar panels into electricity that drivesa moving system of sun blinds.
Waste avoided: one problem fewer to deal withThe paint shop at Neckarsulm demonstrates how it ispossible to actively protect the environment by preserv-ing resources and reducing emissions in all areas of thecompany. When vehicle bodies are being painted, a de-gree of overspray is inevitable; surplus filler coat can,however, now be recovered by means of ultra-filtration,and recycled. The method reduces the amount of mate-rial consumed and the volume of special waste. Audi isthus practising the key principle of environmental pro-tection: avoid causing waste in the first place, and youneed not concern yourself with its disposal.
Building cars entails demonstrating responsibility
for the environment.
Reducing water consumptionWater is precious, and must be used sparingly and withcare. To preserve water resources, Audi is making in-creasing use of rain water at Ingolstadt. Undergroundcisterns with a total capacity of 5,300 cubic metres havebeen constructed for this purpose. Audi has now invest-ed around DM 10 million in these rainwater retentionbasins as a form of environmental protection. The rain-water collected in them is treated at the company’swater treatment plant and fed into the service watersystem. Over 100,000 cubic metres of rainwater is usedin this way each year.
36 Environmental Protection
Day after day we concentrate on oneand the same thing: innovation.
The new flagship facilityThe Audi Forum Ingolstadt, a collection of buildingsgrouped together around a central outdoor area, openedits doors in December 2000. Its architecture embodiesthe philosophy of the company: fascinating technologypresented in compelling style, with people always thecentral focus. A form of presenting the company tocustomers, business associates and guests that is a fit-ting reflection of the Audi brand claim. A facility at theIngolstadt plant that fulfils a flagship function for thecompany.
The Customer Center, completed in 1992, is wherecustomers come to collect their new car directly fromthe factory. The Audi Shop stocks accessories and car-related lifestyle articles. Customers can find out moreabout the customisation range available from quattroGmbH in a special showroom. The facilities also includeInternet terminals and attractive cinema programmes.
The triangular “Market and Customer” building hashoused the Audi Bank, the insurance service and a travelagent since autumn 1999. Employees can arrange topurchase or lease their new Audi at the Employees’Vehicle Centre. The current range of Audi models is alsoon display in the same building.
The museum mobile traces the history and evolutionof the Audi brand from its very beginnings to the pres-ent day. Visitors can enjoy a wide range of culinary de-lights at the various catering establishments locatedbetween the museum and the Customer Center. Thereis the Lounge, the Wine Shop, a Mövenpick self-servicerestaurant and a conventional restaurant.
The piazza, which is accessible to all users, serves as a venue for special events and therefore as a plat-form for communication between the company and theIngolstadt region. Next to the Customer Center is thepiazzetta – a small, relaxing park area with fountains.
Audi Forum Ingolstadt
Audi and moreThe redesigned entrance zone enhances the appeal andmerit of the Ingolstadt plant. This new experience is alsointensified by the restructured factory tours, which fol-low the production process.
The unique combination of vehicle collection facili-ties, museum visits and catering establishments givesthe visitor an all-encompassing experience.
Regional tourism is likewise benefiting from the new Audi Forum Ingolstadt. Audi, in conjunction with a travel company and Internet provider, has developeda new tourism programme of premium calibre: selectedhotels and activities that are a refreshing change frommass tourism entice visitors to spend longer in Ingol-stadt and the surrounding region – in particular in theAltmühl Valley, the largest nature park in Germany.
Presenting the Company in Ingolstadt 41
An image from the natural worldThe museum mobile was formally opened on Decem-ber 15, 2000. The new museum, with its striking archi-tecture, attracts the onlooker’s gaze from afar. This un-usual concept was inspired by the natural world: thecross-section of a tree trunk with its annual rings. Fromthe germinating seed – the fledgling company A. Horch& Cie. established in 1899 by August Horch – to the ma-jestic, spreading tree with its deep roots – the present-day Audi Group – the passing of each year can be tracedwith the appearance of another ring.
Mobility within immobilityThe architecture is not its only unusual feature. The ex-hibition concept, too, sets new standards. The entirebuilding appears to be in motion: moving sunscreenson the outside encircle the museum once in 24 hours,and moving panels on the inside present the back-ground social history to the exhibits. A continuouslyrunning paternoster elevator contains prototypes span-ning the past 100 years, and the visitor can also operatevarious moving exhibits. The overall impression is ofmobility within immobility: the visitor is actively ab-sorbed into the era being presented. The name says itall: museum mobile.
A brief tour of the museumAfter watching the short introductory film in the cinema,visitors set off on a journey back through time to theyear 1899. They then begin to explore the origins of Audiand trace the logical progression of the exhibits as timepasses, covering a century of the motor car before ar-riving back at their starting point.
The visitor’s attention is captured by numerous ac-tive exhibits which present the history of the Audi brandand of all its predecessor brands. Visitors can witness adiscussion between several leading personalities fromAudi’s past, and watch a vivid evocation of how one carmanufacturer after another went bankrupt during theGreat Depression. Back then, 44 German car companieswent out of business – and the rapid rise of Auto Union,formed by the merger of Audi, DKW, Horch and Wandererin 1932, began.
Vorsprung durch TechnikEven though this slogan was not coined until 1971, it is rooted in Audi’s distant past.
museum mobile – animated history
There’s nothing new about aluminiumAugust Horch was very interested in the scope for usinglight metal right from the start. He was the first personto use aluminium for engines and gearbox housings.Lightweight construction methods consequently goback more than a century at Audi. In this respect, theAudi Space Frame, developed by the Neckarsulm Alu-minium Centre and used in the A8 and A2, is part of agrand tradition.
Front or rear-wheel drive?Although neither Audi nor any of its predecessor brandscan claim the credit for the revolutionary idea of front-wheel drive (the US manufacturer Cord was makingfront-wheel-drive vehicles as early on as 1929), theDKW F1 from 1931 was the car which took the conceptinto volume production and made it reliable for themarket. This was the forefather of all DKW front-wheel-drive models built until the 1960s.
… quattro!As long ago as the late 1960s, Audi took its parent com-pany in Wolfsburg by surprise with a “secret” in-housedevelopment: the Audi 100. Then in 1978, Audi engineersdemonstrated their art with a vehicle that succeeded in climbing the snow-bound Turrach Heights, Europe’ssteepest mountain pass, “on all fours” – and with ordi-nary summer tyres! The quattro idea was born. In launch-ing the concept of permanent four-wheel drive, Audicreated yet another innovation that enjoyed unprece-dented success.
Too loud, too lumpy, too crude?These used to be the classic features of a direct-injectiondiesel engine. Everyone knew how economical and highon torque this type of engine was because it had longbeen a popular choice for trucks. For many years, how-ever, it seemed impossible to exploit these advantagesin a passenger car. Then, in 1989, Audi developers un-veiled the first direct-injection diesel engine for a pro-duction car: the 2.5 litre five-cylinder TDI engine. Thanksto its low fuel consumption and enormous propulsivepower, it prompted a genuine boom in TDI engines thatis still continuing today.
42 museum mobile
We want to leave youwanting nothing.
A genuine Audi …Vorsprung durch Technik: as an “ambassador of change”,Audi has produced vital innovations that underline itsinternational pioneering role. We do not try to do every-thing like so many; instead, we do what we do with in-imitable style. This gives every Audi a distinctive char-acter: sporty, progressive, sophisticated.
… enjoys the limelight.Car shows provide a fitting context in which to demon-strate innovative vehicles and concepts to the publicworldwide. “In Future – Audi” was the motto for the pres-entation of the new Audi allroad quattro at the GenevaMotor Show in March 2000 and the unveiling of theSteppenwolf design study in Paris in early October. The high point of the year was the launching of the newAudi A4 at the aaa 2000 in Berlin: our most important,top-selling model. It is distinguished from its competi-tors not primarily by individual details, but rather by itsoverall concept of “The Complete Car”.
Sporty – progressive – sophisticated
46 Marketing and Service
Thanks to our specialist dealers …Every customer can be sure of one thing: their Audidealer knows what he is talking about. Even before anew model is launched, all Audi dealers worldwide arefamiliarised with the facts and figures at extensive deal-er launches spanning several weeks. And – as was thecase with the new Audi A4 in Portugal – they have liter-ally obtained “hands on” experience of each new modelby test-driving it themselves before the first potentialcustomer gets behind the wheel.
… our customers know what they are getting.The advertising campaign for the launch of Audi’s new-est model vividly evokes what goes into “The CompleteCar”. TV commercials and print media advertisementsalike convey the absolute harmony that the Audi A4embodies: the perfect interplay of all component partscreates something very special, something that is morethan merely the sum of its parts.
Marketing and Service 47
Vorsprung durch Technik www.audi.de
Wann ist die Suche beendet?Wenn die Freude anfängt.
Der neue Audi A4.Die Entdeckung des Ganzen.
Automobile sind ein bisschen wie wir. Immer unterwegs, ständig angetrieben. Und wenn beim Beschleunigen, in einer Kurve oder auf einer sehr, sehr langen Geraden ein Gefühl der Freude aufkommt, hat sich etwas gefunden. Und die Suche legt endlich eine Pause ein.
Weitere Informationen unter 0 800-283 43 42.
Wann ist die Suche beendet?Wenn die Freude anfängt.
Der neue Audi A4.Die Entdeckung des Ganzen.
Automobile sind ein bisschen wie wir. Immer unterwegs, ständig angetrieben. Und wenn beim Beschleunigen, in einer Kurve oder auf einer sehr, sehr langen Geraden ein Gefühl der Freude aufkommt, hat sich etwas gefunden. Und die Suche legt endlich eine Pause ein.
Weitere Informationen unter 0 800-283 43 42.
Demand higher than in 1999Vehicle sales by Audi rose for the seventh year in suc-cession: the rate of increase in 2000 compared with the previous year was 2.9 percent. The total for the Audi Group was further boosted by the incorporation of Autogerma.
Last year, the Audi Group saw its vehicle sales rise to 919,621 (634,973) vehicles. This total included653,404 (634,708) vehicles sporting the Audi badge and 296 (265) of the Lamborghini Diablo. Following theincorporation of AUTOGERMA S.p.A. into AutomobiliLamborghini Holding S.p.A., the Audi Group’s deliveryrange now for the first time includes other brandsbelonging to the Volkswagen Group. During 2000,Autogerma sold 265,921 vehicles of the Seat, Škoda,Volkswagen Passenger Car and Volkswagen CommercialVehicle brands in Italy, in addition to Audi cars.
In Germany, Audi – in common with many other carmanufacturers – felt the impact of the decline in new-car registrations: unit sales by the Audi brand fell to239,644 (257,642). Outside Germany, on the other hand,more Audi vehicles were sold than in 1999: the total
Renewed increase in vehicle sales by Audi Group
reached 413,760 (377,066). The percentage of total vehi-cle sales outside Germany thus rose from 59.4 percentin the previous year to 63.3 percent.
Germany: four new models launchedAudi brought four new models onto the German marketin the course of 2000. First came the Audi allroad quattroin May. One month later it was followed by the Audi A2,voted by a clear margin the most important new car of2000 by the readers of “Auto Zeitung”, and the RS 4.The end of the year saw the launching of the new AudiA4 saloon version.
Audi sets new sales record in the USAAudi last year surpassed its previous sales record of74,100, which had stood since 1985. As in 1999 the USAwas our largest export market, with 80,372 passengercars sold. Almost 90 percent of vehicles were orderedwith permanent four-wheel drive.
The early part of the year saw two market launches:in good time for the summer, US enthusiasts of open-top driving were able to savour the fresh air in the
48 Market News
Audi TT Roadster. Rear passengers in the long-wheel-base version of the Audi A8 4.2 quattro were able to en-joy more head, shoulder and leg room than previously.The Audi allroad quattro took to the roads – and theterrain – in the autumn.
The Audi A6 2.7 T, the A6 4.2 and the Audi TT Coupéhad the honour of being listed among the “10 Best Carsfor 2000” by the auto magazine “Car and Driver”. Andthe Audi S4 received the “2000 Grand Prix Award” fromthe “European Car Magazine”.
Great Britain: largest export market in EuropeIn a year in which car prices in the UK were broughtdown by an average of ten percent, to the level of otherEuropean countries, Audi was able to increase its marketshare. With the market as a whole virtually stagnant, 8.3 percent more vehicles with the four-ring badgewere sold than in the previous year.
2000 was an extremely successful year for the Audi TTin particular, which is available exclusively as a quattroin Great Britain. The sales totals for both the Coupé andthe Roadster exceeded our expectations.
The Audi A2 was launched to considerable pressacclaim. The magazine “Autocar” awarded a very rarefive stars following its road test, declaring the A2 to be“the most desirable supermini in history”.
Italy: Audi TT Roadster – Best New ProductThe Audi TT Roadster was voted Best New Product of2000 by the readers of the magazine “Quattroruote”. Thecriteria according to which the candidates were judgedwere design, technology and level of innovation.
Last year Audi sponsored the charity concert“Pavarotti & Friends” in Modena for the first time. Thepurpose of this event was to raise money for child vic-tims of war in Cambodia and Tibet.
New showroom in the heart of ParisAudi’s triple victory at Le Mans substantiates our claimto sporting prowess and is also boosting the popularityand appeal of our brand.
The new Audi showroom in Paris, in the Rue Royale,was officially opened in June. This facility gives Audi afurther prestigious address in the French capital.
Market News 49
Major markets Unit sales Year-on-year Market share in Year-on-year2000 percentage change 2000 in percent percentage change,
overall marketAudi cars, worldwide 653,404 2.9Germany 239,644 –7.0 6.9 –11.1USA 80,372 21.9 1.91 9.41
Great Britain 43,612 8.3 1.9 1.1Italy 41,020 –7.1 1.7 3.3Spain 38,420 0.5 2.8 –2.0France 36,874 0.2 1.6 –0.7Belgium 18,309 –1.4 3.5 5.2China 17,451 152.5 2.7 5.9Switzerland 16,327 –4.3 5.2 –0.1Austria 14,949 –3.8 4.9 –1.5Netherlands 13,220 5.4 2.0 –2.3Sweden 12,440 1.5 4.2 –1.6Brazil 9,489 133.7 0.8 13.4Japan 6,972 8.4 2.81 0.91
Lamborghini cars, worldwide 296 11.7
1 Foreign brands only
The Audi A8 L 6.0 quattro made its world début atthe Paris Motor Show. The Steppenwolf study likewisemade its first public appearance there.
Switzerland: heading for the mountains by quattro A reader poll in “Motorpresse Schweiz” pronounced the Audi TT Coupé the best car of 2000 in its class. TheAudi TT Roadster and the Audi A3, A4, A6 and A8 all fin-ished among the top three in their respective categories.Audi also won the category for “Best Advertising”.
Over half of all Audi cars exported to Switzerland areequipped with permanent four-wheel drive; this makesSwitzerland the European country with the highest pro-portion of Audi drivers who place their trust in quattro.
Czech Republic: spotlight on AudiAudi recorded sales of 1,141 (1,074) cars in the Czechmarket – 6.2 percent up on the previous year. This riseoutstripped the growth in the Czech market as a whole,where first-time registrations rose by 1.6 percent.
The annual conference of the IMF and World Bank,from September 26 to 28 in Prague, was a media event
that gave Audi an ideal opportunity to raise its profile. A fleet of 230 Audi cars, made up of A8 and A6 models,was placed at the disposal of leading representatives of the financial world.
Performing groundwork for a bright future in RussiaAudi more than doubled the previous year’s unit sales here, to 1,171 (502) vehicles, and for the first time occupied the rank of second-largest make in thepremium segment of the resurgent Russian market.With the Audi allroad quattro, available since last year,and the market launches of the new Audi A4 and Audi A8 L 6.0 quattro scheduled for this year, Audi isperforming the groundwork for a brighter future inRussia.
Israel: largest premium German makeLast year we sold 1,852 (1,228) cars in Israel, an impres-sive year-on-year increase of 50.8 percent. Whereas Audiwas only the third-ranking premium German make asrecently as four years ago, 2000 was already its secondyear in the top spot.
50 Market News
In the early summer of 2000, Audi sponsored thefirst International Opera Festival in Caesarea, buildingon its partnership with the New Israeli Opera of Tel Aviv.The programme included performances of two operas,in the Roman Theatre against the backdrop of theMediterranean, as well as a concert with Jessye Norman.
Leading position in China strengthenedAudi boosted its unit sales for 2000 in China by over150 percent, to 17,451 vehicles.
By the end of 2000, Audi had 31 retail partners in the country’s largest cities. Twelve dealerships withAudi hangars have already been completed, and a fur-ther eleven are under construction. The recently openedAudi dealer in Zhuhai, South China, is among Audi’sfive largest hangar buildings in the world. By the end of2001, there will be a total of 51 dealerships dedicatedexclusively to the Audi brand in China.
The development of the exclusive dealer network, in conjunction with the successful market launch of thespecial Chinese version of the A6, has clearly had a pos-itive influence on Audi’s position as a premium brand.
The focus is being shifted increasingly to private buyers,by means of the latest communication and customercontact measures.
Brazil: successful sales joint ventureAudi established a new sales record last year in thelargest country in South America; the previous year’sfigure was more than doubled, with unit sales reaching9,489 vehicles. The locally built Audi A3 accounted forthe bulk of this total.
The joint venture AUDI SENNA Ltda., based in SãoPaulo, was created on January 1, 2000 with the objectiveof selling our vehicles in Brazil. AUDI AG holds a 51 per-cent stake in the company, with the former importerSenna Import owning the remaining shares.
Market News 51
Thailand: marketing joint ventureIn parallel with the start of local production of the Audi A6, a marketing joint venture with the local im-porter was launched in Thailand. The restructuring ofthe dealer network, to introduce greater brand exclusiv-ity, culminated in the opening of the new exclusivedealership in Vipavadee, Bangkok.
Mid-way through 2000, the locally built Audi A6 wenton sale in Thailand. 249 (238) customers took delivery ofan A6 by the end of the year.
Winds of change for Audi Japan In Japan, 2000 was a year in which Audi placed the em-phasis on restructuring its dealer network. The numberof retail outlets was slimmed down from 250 to 100, nowlargely exclusive to the Audi brand. Audi anticipatesthat this change will create the premium environmentthat is needed to give its image and sales a significantboost.
In an effort to enhance our brand presence in Japan, we have brought new models onto the marketand given the established models much more overtlysporty equipment specifications. We have in additionoptimised our communication measures.
Lamborghini acquires new subsidiary in ItalyLamborghini sold 296 (265) sports cars in 2000. Itslargest market was the USA, which accounted for unitsales of 99 (131). Western European customers pur-chased 159 (95) Diablo models.
Since the transfer of AUTOGERMA S.p.A. from Volks-wagen Beteiligungs-Gesellschaft mbH to AutomobiliLamborghini Holding S.p.A., the Audi Group has beensupplying vehicles of other Volkswagen Group brandsin Italy, over and above Audi cars and the Diablo. Allmotor vehicle operations of the Volkswagen Group inItaly are consequently now handled by this nationalholding company.
52 Market News
Audi sets sail – with the Streamline close to the windIn addition to its established sponsorship activities inthe worlds of skiing, show-jumping and golf, Audi hasnow added high-tech sailing to its portfolio.
A new-concept yacht by the name of “Streamline”was developed with Audi’s support. This venture in-volved cooperation of a technical nature: flow researchconducted in Audi’s ultramodern wind tunnel and ex-pertise in materials engineering acquired in the fieldsof motor sport and CAD technology also have a contri-bution to make towards this innovative regatta boat.
The Streamline set sail for the first time last Octoberin the International German Match Race Championshipin Kiel, for which Audi was the principal sponsor. A high-quality field of competitors guaranteed an interestingregatta, promising further exciting races involvingthese new three-man vessels.
Audi broadens horizons.
Glyndebourne Festival – Mozart opera with picnicAn eccentric music-lover opened an opera house on his country estate in the south of England in 1934. Thispaved the way for one of the most famous festivals ofopera in the world: the Glyndebourne Festival. Last yearsaw Audi become involved for the first time in the ca-pacity of sponsor, focusing on a new production of theopera “Don Giovanni” by Wolfgang Amadeus Mozart.
The appeal of this unconventional cultural occasionstems from its happy blend of music, architecture andhorticulture. Opera-lovers at Glyndebourne are re-nowned for their famous champagne picnics in the park during the interval.
In addition to its involvement in Glyndebourne andthe Salzburg Festival, as well as many other nationaland international music festivals, Audi once again or-ganised the “Summer Concerts between Danube andAltmühl” last year in conjunction with the Bavarianbroadcasting corporation Bayerischer Rundfunk.
Customers, importers, Audi dealers and employees areall able to take part in the company’s cultural activities,for example by making use of the special ticket service.
Sports and Cultural Sponsorship 53
Visions are dreamsplus reality.
Development of major car marketsNew registrations in million units
36.2 37.4 34.6 36.7 37.3
15
10
05
1996 1997 1998 1999 2000
Western Europe North America Japan Other
Economic upturnGrowth in the global economy continued to gatherpace in 2000. This development was bolstered by the pro-nounced upward trend in the USA and robust expansionin Europe – though the economies in both zones sloweddown again towards the end of the year – and by a re-covery in Asia. Japan also showed progress. The funda-mental data in most threshold countries likewise im-proved. Latin America and the Middle East made upground in 2000, after the slowdown of the previousyear.
There remains considerable imbalance in both theeconomic and the financial and monetary conditionsbetween the US dollar, yen and euro currency zones.The rise in the price of oil during the course of 2000could pose a threat to the long-term prospects for sus-tained global economic expansion. The slowdown inthe US economy has moreover been more rapid thanhad been expected even fairly recently, and this has had a correspondingly negative knock-on effect onother national economies.
Automotive sector worldwide in good shapeIn parallel with the generally healthy global economy,the automotive sector made positive progress in 2000.
In Western Europe, where first-time registrations to-talled just under 15 million, the figure nevertheless fellshort of the prior-year figure by two percent. In Germany,the number of cars being newly registered actually de-clined more sharply, by around eleven percent. Regis-trations in Belgium, Greece and Ireland rose. The majorcar markets of Great Britain and Italy expanded onlyslightly. Fewer passenger cars were registered as newin France and Spain in 2000.
In the USA, both the market as a whole and themarket for imported vehicles grew. Around 8.8 millionpassenger cars were registered as new there.
South America recovered after the slack period ofthe previous two years, with first-time registrations ris-
General economy and the sector
ing by approximately nine percent. The revival in Brazil,the largest market in the region, was particularly pro-nounced.
First-time registrations of cars in Japan were mar-ginally up on the previous year.
Car production totals by and large reflected thetrend in first-time registrations, with the exceptions ofWestern Europe and the USA: in Western Europe pro-duction output was marginally up on the previousyear’s figure. Slightly fewer vehicles were built in theUSA than in 1999. Both production totals and new carregistrations in South America were up; the rise in pro-duction output was much sharper because of the highproportion of vehicles built there for export.
German car market slumpsThe domestic and export sectors of the German car in-dustry experienced contrasting fortunes. Whereas ex-ports flourished, the domestic market took a nose-dive:new registrations were around eleven percent down onthe 1999 figure, at 3.4 million. Foreign makes accountedfor a 34 (34) percent share.
Car exports rose by 1.1 percent to 3.5 million units.The weak state of the domestic market was due
partly to the very high number of used cars in circula-tion, and partly to the continuing fall in the average age of vehicles on Germany’s roads; this consequentlyled to lower after-demand. The high price of diesel andpetrol also had a constraining effect on sales of newcars.
Car production in Germany moreover did not matchthe level of 1999, with 5.1 million units produced.
56 Management Report
Development of major car marketsNew registrations in million units
36.2 37.4 34.6 36.7 37.3
15
10
05
1996 1997 1998 1999 2000
Western Europe North America Japan Other
Diesel- und quattro-Anteile an der Produktionin %
40
30
20
10
1996 1997 1998 1999 2000
Diesel-Anteil quattro-Anteil
Rise in sales and earningsThe higher unit sales and the first-time inclusion ofAUTOGERMA S.p.A. in the consolidated financial state-ments of the Audi Group meant that sales revenues roseby 31.7 percent to DM 39,024 (29,624) million. Sales out-side Germany generated 66.1 (54.0) percent of this total.Without the new Italian subsidiary, sales would havetotalled DM 32,089 million – an increase of 8.3 percent.The gross operating result, in other words the differencebetween sales revenues and manufacturing costs, wasDM 3,783 (3,304) million. Earnings before taxes, follow-ing the deduction of DM 251 million in extraordinaryexpenses to cover take-back and disposal commitmentsfor scrap vehicles in compliance with the new EU direc-tive of October 21, 2000, were roughly on a par with theprevious year’s figure, at DM 1,605 (1,640) million. Thesales return before taxes was consequently 4.1 (5.5) per-cent. The group’s net earnings showed a 35.5 percentincrease, to DM 859 (634) million.
AUDI AG recorded an increase in sales revenues to DM 31,476 (29,151) million; earnings before taxesamounted to DM 1,001 (1,449) million.
On the basis of the existing profit-transfer arrange-ment, AUDI AG transferred DM 176 (222) million toVOLKSWAGEN AG. Allocations to other revenue re-serves totalled DM 176 (222) million for AUDI AG andDM 683 (412) million for the Audi Group.
For the 2000 financial year, those with small share-holdings in AUDI AG will receive a compensatory pay-ment for each Audi individual share certificate insteadof a dividend payment. It will be equivalent to the divi-dend paid out on one VOLKSWAGEN AG individual sharecertificate, to be determined by the Annual GeneralMeeting of VOLKSWAGEN AG on June 7, 2001.
Production stepped upIn response to higher overall demand, Audi furtherstepped up vehicle production in the year under review.The group built 650,850 (626,059) vehicles in total, an
Situation of the company
increase of 4.0 percent. This included 291 (252) of theLamborghini Diablo. In 2000, Audi dealers outside Ger-many were supplied with 22,983 (7,594) cars built fromcompletely knocked down (CKD) or semi knocked down(SKD) parts kits.
136,141 (143,333) of the Audi A3 were built at theIngolstadt plant. 227,028 (248,425) of the Audi A4 inaddition left the production line there. Total productionat Ingolstadt thus reached 363,169 (391,758) vehicles. At the Neckarsulm plant, our workers turned out169,276 (161,037) of the Audi A6, 32,164 of the Audi A2and 12,894 (14,636) of the Audi A8. The new Audi allroadquattro is also built there. 11,439 of this new modelwere produced in the financial year.
The Audi TT Coupé and Audi TT Roadster are builtjointly by the Ingolstadt and Györ (Hungary) plants. Audiships painted bodyshells manufactured in Ingolstadt toHungary, where they are assembled into finished cars.A total of 56,776 (52,579) of the Audi TT were producedby this method in the 2000 financial year.
In the year of its market launch, quattro GmbH builta total of 2,530 of the Audi RS 4 in Neckarsulm.
As in the previous two years, Wilhelm Karmann GmbHbuilt the Audi Cabriolet at its Rheine plant. Becauseproduction of the previous model was being wounddown, only 2,311 (4,086) of this model left the plant.
Demand for diesel versions has surged following the rise in fuel prices. During the period under review,40.1 (37.5) percent of all Audi vehicles were fitted with aTDI engine. Models with permanent four-wheel drive arelikewise much in demand: 20 years after the launchingof the quattro concept – at the time of its appearance,an utterly revolutionary development – 30.8 (27.0) per-cent of all Audi cars produced in 2000 had four-wheeldrive.
Due to lower demand from within the VW Group,engine production by the Audi Group eased off to1,187,666 (1,266,896) units. Only 121,971 (263,553) four-cylinder engines were built at the Ingolstadt plant. By
Management Report 57
Diesel and quattro shares of total productionin %
40
30
20
10
1996 1997 1998 1999 2000
Diesel share quattro share
contrast, AUDI HUNGARIA MOTOR Kft. boosted its out-put to 1,060,828 (1,001,912) four, six and eight-cylinderengines. Lamborghini manufactured 291 (252) high-performance car engines. The British subsidiaryCOSWORTH TECHNOLOGY LIMITED stepped up itsproduction to 4,576 (1,179) engines, including the 280 kW unit for the Audi RS 4.
49.5 percent (49.7 percent) of all engines manufac-tured by the Audi Group were supplied to other mem-ber companies of the Volkswagen Group.
Further increase in demand for Audi vehiclesIn the 2000 financial year, 653,404 (634,708) vehicles of the Audi brand were sold worldwide. Demand thusoutstripped the previous year’s level by 2.9 percent.Sales of the Lamborghini Diablo rose by almost twelvepercent compared with 1999, to 296 (265) units. A fur-ther 265,921 vehicles of the Seat, Škoda, VolkswagenCommercial Vehicle and Volkswagen Passenger Carbrands were additionally sold via the newly consoli-dated company AUTOGERMA S.p.A.
As in previous years, the Audi A4 was the top-sellingmodel. Demand for the predecessor to the new Audi A4 –launched in November – remained high right to the endof its model life. Total sales of the Audi A3 and Audi A6were likewise up on the previous year.
Successful launches of new modelsAudi’s first new model of 2000 was the Audi allroadquattro, launched in May. It combines the comfort of a saloon car with outstanding off-road properties.
The RS 4 made its market entry in June; this carunites all the virtues of a high-performance sports carwith the everyday suitability of an Avant.
The same month saw the appearance of the Audi A2,the first volume-built aluminium car. Its body is around40 percent lighter than an equivalent steel structure.The A2 is a successful fusion of operating economy andliveliness.
An important new model making its début duringthe period under review was the new Audi A4, whichhas been on the market in Germany since November2000. This thoroughly new design has been much ac-claimed by both press and public. The sales figures forthe new-generation A4 confirm that Audi will be able tobuild on the tradition of success of this model, which is of vital commercial importance to the company.
Further new products were unveiled at the inter-national motor shows in Geneva and Paris. These includea new W-configuration twelve-cylinder engine for thelong-wheelbase Audi A8, and the Steppenwolf designstudy.
The Audi A3 was rejuvenated in autumn 2000. Thechanges to its exterior are very subtle. However, it isnow available with new engines, and has an even moreexclusive interior and many detail improvements.
A retrofitting campaign for the Audi TT sports carwas launched at the start of the year even though a de-tailed study by Germany’s Technical Inspection Agency(TÜV) confirmed that the Audi TT was a better than av-erage sports car. The campaign was brought to a con-clusion at the end of 2000. Around 42,600 of the Audi TTwere retrofitted with the Electronic Stability ProgramESP at various company plants.
More employees within the groupThe launching of new models, the resulting broad-ening of production operations and the acquisition ofAUTOGERMA S.p.A. all contributed towards an increasein the Audi Group workforce. On December 31, 2000there were 50,535 (46,558) employees in total, including6,673 (5,418) outside Germany. 29,914 (28,426) of ouremployees were based in Ingolstadt, and 13,948 (12,714)in Neckarsulm.
AUDI HUNGARIA MOTOR Kft. employed a total of4,831 (4,312) people at the end of the year, and theLamborghini Group 440 (380). AUTOGERMA S.p.A. had
58 Management Report
Sales of Audi vehicles
2000 1999A2 20,168 –A3 147,581 146,322TT Coupé 32,039 41,542TT Roadster 24,143 3,261A4 incl. RS 4 229,529 254,895Cabriolet 3,020 4,501A6 175,357 169,250allroad quattro 8,213 –A8 13,354 14,937
Capital investments in the Audi Groupin DM million
1,445 1,967 3,168 2,966 3,9651,496 1,994 2,373 2,274 2,876
4,000
3,000
2,000
1,000
1996 1997 1998 1999 2000
Capital investments Cash flow
624 employees. On December 31, 2000 COSWORTHTECHNOLOGY LIMITED employed a workforce of 764 (711).
Investments safeguarding long-term successThe Audi Group invested DM 3,965 (2,966) million in the2000 financial year. DM 3,096 (2,799) million of this sumwas spent on fixed assets during the course of regularbusiness operations and DM 812 million on capital in-vestments resulting from the acquisition of AUTOGERMAS.p.A. The cash flow, totalling DM 2,876 (2,274) million,covered 92.9 percent of spending on fixed assets. Ouroverriding objective remains to consolidate the basisfor sustained corporate success by making and imple-menting investment plans with foresight and a view tothe longer term.
Around two billion marks in total were invested innew buildings, production plant and special tools for thenew Audi A4. The bulk of these investment measureshad been completed by the end of 2000.
Some DM 120 million were channelled into the “NewToolshop” project at Ingolstadt, which was completedin April 2000. The new hall has space for 17 trial presseswith pressing forces of up to 2,100 tonnes, eight large-scale processing machines and a “try-out area” for as-sembling complete body production lines measuringup to 75 metres in length. The design and layout of thenew toolmaking shop provides improved working con-ditions for the employees. This is the first toolmakingshop to have received accreditation from the TechnicalInspection Agency (TÜV) according to Directive 6.4 ofthe German Automotive Industry Federation (VDA). It supplies both Audi and other car manufacturers withpress tools, body production plant and assembly facil-ities for the manufacture of body panel sections andassemblies.
The third and final phase of the new paint shop atthe Neckarsulm plant was completed in October 2000.This phase cost in the order of DM 130 million. The over-
all project, at DM 600 million, was the largest invest-ment project to date in the history of that plant. Thethird phase permits the adoption of segmentation; inother words, different model series are processed indifferent sub-sections of the paint shop. This enhancesthe facility’s flexibility and performance.
Purchasing volume risesThe purchasing volume for 2000 totalled DM 21.1 billion.This compared with a figure of DM 20.8 billion for theprior year. Direct materials accounted for DM 17.7 (17.1)billion of the total, and investment goods, services andexpendables for DM 3.4 (3.7) billion.
A new corporate profile in IngolstadtThe Audi Forum Ingolstadt, the company’s new archi-tectural flagship facility, was officially opened in Decem-ber 2000. It centres on the museum mobile, in whichthe development of Audi and its related brands is pre-sented through more than a century of the motor car.
The Customer Center, which has been in use since1992, is the place where customers can collect theirnew vehicle in person. The link building between themuseum mobile and the Customer Center houses high-class catering establishments. Various services arebased in the “Market and Customer” building, completedin 1999, which also contains office facilities for over 600employees. Together with the expansive 20,000 square-metre piazza at the centre, these buildings create aharmonious architectural ensemble that can serve as a stage for events, interaction and communication.
Renovation of August Horch Museum in Zwickau Audi and the city of Zwickau established the non-profit-making body “August Horch Museum Zwickau GmbH”in December 2000. The purpose of the company is tokeep a record of the history of car manufacturing inZwickau and other Auto Union locations especially in
Management Report 59
Capital investments in the Audi Groupin DM million
1,445 1,967 3,168 2,966 3,9651,496 1,994 2,373 2,274 2,876
4,000
3,000
2,000
1,000
1996 1997 1998 1999 2000
Capital investments Cash flow
Saxony. Its tasks include completely renovating themuseum building and the August Horch Villa, lookingafter and restoring the vehicle collection, organisingnew exhibitions and running the museum. Audi intendsto subsidise the restoration of the building to the tuneof around DM 13 million over the next few years.
Company switches to the euroWith effect from January 1, 2001 the Audi Group switchedfrom the German mark to the euro as its standard cur-rency. All internal non-cash financial transactions areconsequently now denominated in euro. In addition tothe arrangements allowing us to conduct our businessin euro that have been in place since January 1, 1999,we have thus taken a further step towards introducingthe euro.
AUDI HUNGARIA MOTOR Kft.Developments in the 2000 financial year at Audi’sHungarian subsidiary, based in Györ, were dominatedby important investments and new products. Marchsaw the production start of eight-cylinder turbodieselengines for the Audi A8. A new generation of diesel en-gines with pump-injector technology has been manu-factured in a purpose-built hall since July. A flexibleproduction line for four and five-valve cylinder headsand a modern centre for near-series development werealso erected.
Sales revenues rose by 20.2 percent to DM 6,648(5,531) million.
The 100,000th Audi TT left the Györ production linein mid-August – one of 56,776 (52,579) to be built thereduring the period under review. 4,831 (4,312) peoplewere employed there on December 31, 2000.
Lamborghini incorporates AUTOGERMA S.p.A.Automobili Lamborghini Holding S.p.A. acquired afourth fully owned subsidiary in the year under review:AUTOGERMA S.p.A., of Verona. Together with the three
other companies Automobili Lamborghini S.p.A., MotoriMarini Lamborghini S.p.A. and Lamborghini ArtiMarcaS.p.A., AUTOGERMA S.p.A. is now owned by a singlenational holding company which controls the group’sentire automotive activities in Italy.
Autogerma is the Italian general importer for theAudi, Seat, Škoda, Volkswagen Commercial Vehicle andVolkswagen Passenger Car brands. The company enjoysa strong position in the Italian market, with over 2,000sales and service outlets and a large parts business.AUTOGERMA S.p.A. had 624 employees at the end of2000.
During the financial year, the car manufacturerAutomobili Lamborghini S.p.A., based in Sant’AgataBolognese, placed the emphasis on a comprehensiveinvestment programme spanning five years. In additionto erecting a new vehicle delivery centre, it invested ina new development centre and an additional companybuilding. Capital investments totalling some DM 200million over five years are intended to restore the com-pany to profitability in the medium term. AutomobiliLamborghini S.p.A. supplied 296 (265) sports cars tocustomers during 2000. Lamborghini opened a show-room at Munich Airport in October 2000, in the immedi-ate vicinity of the Audi Forum.
The Lamborghini Group posted sales revenues ofDM 119 (92) million in the period under review. Thecompany had 440 (380) employees on December 31 oflast year.
COSWORTH TECHNOLOGY LIMITEDThis manufacturer of high-quality, very high-performanceengines has three sites in the English Midlands. Enginesand drivelines are designed and developed at the com-pany’s headquarters in Northampton. Aluminium cylin-der heads and engine blocks are produced by a unique,patented aluminium engine casting method at Worcester.The subsequent production and final assembly of the en-gines themselves then takes place out at Wellingborough.
60 Management Report
COSWORTH TECHNOLOGY LIMITED in addition ownsall the shares of Cosworth Technology, Inc., Novi (USA).The latter develops information and diagnostic systemsfor vehicles.
Sales by COSWORTH TECHNOLOGY LIMITED duringthe period under review totalled DM 219 (134) million.The company, which is still undergoing restructuring,reported a negative result of DM -26 (-36) million. Thecompany had 764 (711) employees at the end of theyear.
quattro GmbH – sales success for the RS 4quattro GmbH, based in Neckarsulm, is a fully ownedsubsidiary of AUDI AG. In addition to customising Audivehicles and offering an extensive range of vehicle com-ponents with sporting flair, quattro GmbH has had prof-itable trading/lifestyle articles operations since 1984.
In June 2000, the Audi RS 4 enjoyed a highly success-ful market launch; this is the first high-performancemodel to have been developed in the context of thenew RS strategy. Thanks to the exceptionally high levelof demand, over 2,500 of this model were sold by theend of the year.
quattro GmbH generated sales revenues of DM 130(38) million during the reporting period.
The Annual General Meeting of AUDI AG on June 29,2000 approved the profit-transfer agreement which wasconcluded between quattro GmbH and AUDI AG witheffect from January 1, 1999. quattro GmbH transferred a sum of DM 38 (-27) million to AUDI AG in the 2000financial year.
Management Report 61
Risk management within the Audi GroupSince the introduction of corporate governance legis-lation (German KonTraG) on May 1, 1998, German publiclimited companies whose shares are quoted on thestock exchange are required by law to establish a riskmanagement system. The purpose of such a system isto identify at an early stage any risks which could havea significant effect on the company’s net worth, finan-cial position and earnings situation and pose a threatto the company’s survival. Such developments includein particular high-risk transactions, the inaccurate prep-aration and disclosure of accounts, and infringementsof legal requirements.
Even before this legal obligation came into being,the Audi Group had installed a system whereby suchrisks could be identified. The arrangements includeclearly defined spheres of responsibility and reportingand record-keeping obligations for the company’s indi-vidual divisions and subsidiaries, as a means of assur-ing the viability of this system.
Following its incorporation into the Audi Group,AUTOGERMA S.p.A. is likewise covered by the existingregulations and procedures for risk management.
Risks from the review of the Block Exemption RegulationThe “Motor Vehicles Block Exemption Regulation” grantscar manufacturers certain exemptions to the require-ments of competition law within the European Union.These exemptions are intended to regulate the mannerin which cars are sold and serviced, in order to assurethe roadworthiness of these products throughout theirentire operating life. Customers must be able to relyon their car being serviced to the highest technological,safety and environmental standards wherever they are.In particular, block exemption permits car manufactur-ers to maintain a selective network of sales partnersand to oblige the latter contractually to maintain highstandards.
Risk report
The European Commission first issued the BlockExemption Regulation in 1985, and extended it in 1995for a further seven years, until September 30, 2002. Theaim was to ensure that the highly complex technologyin modern cars was maintained in a proper and safecondition, provided this did not hinder the evolution of the single market.
The European Commission is currently investigatingwhether and in what form the regulation is to be re-newed a further time. It published a report on Novem-ber 15, 2000. In it, the Commission raises the objectionthat block exemption has obstructed independent com-petition, and that consumers in particular are disadvan-taged because the existing system prevents them fromreaping the benefits of the free movement of goodsacross national borders.
The Association of European Car Manufacturers(ACEA), on the other hand, emphasises that block ex-emption is the only way its members can guaranteeconsumers a broad-based, high-quality car network. Itbelieves that deregulation would result in the thinning-out of dealer networks and cause them to become con-centrated in urban centres. It anticipates that many ofthe surviving workshops, which would then be inde-pendent, would only be prepared to perform basic re-pairs. As a result it could no longer be guaranteed thatvehicles could be kept both in safe working order andin an environmentally acceptable condition throughouttheir useful life.
The European Commission’s report of November2000 does not indicate in what ways the current BlockExemption Regulation for cars may be modified. TheCommission intends to present the proposed new ar-rangements by the end of 2001. These will then be intro-duced by no later than the first half of 2002.
The unforeseeable nature of the new arrangementsat European level harbours the imponderable risk forthe Audi Group – as indeed for all other manufacturers –that the basis for the existing selective sales system
62 Management Report
would be eradicated by the abolition of block exemption.Independent dealers and retail chains (e. g. supermarketsand the financial services sector) would then be able tosell new vehicles. This could necessitate the creation offundamentally new channels along which vehicles wouldpass from the manufacturer to the customer.
In order to be adequately equipped for the potentialrestructuring of the sales network, Audi has investigatedseveral scenarios. Appropriate sales strategies havebeen drawn up for each scenario. These will permit thegroup to respond promptly and fittingly as soon as thenew legal position takes on definite shape.
Risks from the EU Directive on end-of-life vehiclesThe EU framework directive on end-of-life vehicles tookeffect in October 2000. Its objective is to avoid vehiclescrap and to re-use components or recycle the materialfrom which they are made.
Car manufacturers are accordingly obliged to acceptback, at their own expense, any vehicles first registeredafter July 1, 2002 and to reprocess them. This require-ment will apply to all scrap vehicles from 2007.
The directive requires that 85 percent of the vehicle’sweight be recycled or overhauled for re-use from nolater than 2006. This quota will subsequently rise to 95 percent. Every scrap car within the European Unionmust moreover be handed in to an authorised salvagedepot. Standards on the identification of componentsand suitable take-back facilities are to be created. Be-fore new models can be homologated, manufacturersmust in addition confirm that the specified reprocess-ing quotas can be met. The use of heavy metals in newcars is to be further reduced in future.
The Directive on end-of-life vehicles must be incor-porated into national law by EU member states by April2002 at the latest. The commitments resulting from theacceptance and reprocessing of vehicles will cause theAudi Group to incur considerable costs, for which wehave made provision in the annual accounts for 2000.
Risks from exchange rate fluctuationsAs a car manufacturer with international operations,the Audi Group is exposed to the risk of exchange ratefluctuations. The foreign currency exposure resultingfrom the manufacture and sale of vehicles is initiallyreduced via the netting scheme operated within the VW Group. It involves the clearing of scheduled cur-rency receipts and outgoings.
The remaining balance of foreign currency is pro-tected against exchange rate fluctuations by the use ofsuitable financial instruments, in accordance with thecurrent group guidelines and within the limits specifiedby the Treasury. Payments resulting from the purchaseof investment goods and services denominated in for-eign currency are protected against exchange rate fluc-tuations by appropriate hedging transactions.
Special group guidelines lay down the boundaryconditions and control mechanisms for hedging againstforeign currency exposure.
Insured risksThe assessment of the likelihood of damaging eventsand of the consequent costs makes it appropriate tohave certain risks covered by third parties. In caseswhere this is also economically expedient or requiredby law, Audi has taken out appropriate insurance coveras part of its risk management measures.
The principal policies which Audi uses include fireinsurance, fire business interruption insurance, motorvehicle liability insurance for vehicles used by the com-pany, and insurance cover for operational, environmen-tal and product risks.
Security risks in information technologyFor a company that operates on a global scale, it is bothessential and logical that its computers and telecom-munications systems worldwide should be networkedand closely linked to the Internet. The dramatic growthin the IT infrastructure means that increasing volumes
Management Report 63
of sensitive information are being exchanged electroni-cally worldwide. Examples of this are the Internet, as an information base and exchange medium, the rapidlyincreasing level of IT integration with suppliers anddevelopment partners, and the spread of e-business.
Meanwhile, the degree of availability required of IT systems is steadily rising, on the one hand as a resultof global networking between our own locations andwith external partners, and on the other hand in re-sponse to the more demanding expectations of users.
To minimise the risks resulting from these moreexacting requirements, Audi will continue to investconsistently in making further improvements to thesecurity and availability of its information technology.This includes for example measures to optimise net-work stability, the implementation of reliable encryp-tion techniques and digital signatures, and the com-prehensive use of virus protection software.
Audi ensures that these measures are implementedoperatively and that appropriate arrangements are ap-plied right through to the individual computer user. Onevitally important aspect is the need to harmonise thedictates of IT security with the requirements of workingroutines within company departments. This is achievedthrough close cooperation between all those involved.
Overall company situationOn the basis of all particulars and circumstances knownto us, there are currently no risks to the Audi Groupwhich would have such a significant effect on its networth, financial position and earnings situation thatthey could endanger the company’s survival.
64 Management Report
Favourable economic climateThe development in economic growth in Audi’s principalmarkets will largely remain positive in 2001.
In Germany, the rise in gross domestic product willbe slightly more restrained than in 2000. Despite a mod-erate decline throughout the euro zone, the economyis expected to progress at a level that is well above thelong-term European average.
There has been a slowdown in the USA, an impor-tant export market, since the end of 2000. This develop-ment, which was expected, has cut in more swiftly thanwas anticipated a few months ago.
Car sector to remain stableThe progress of the car sector worldwide is largely mir-roring that of the economy as a whole.
New-car registrations in Germany are forecast to re-cover slightly in 2001. Slight growth is expected through-out the euro zone, but the car sector in the USA will fallwell short of the previous year’s totals.
Success in 2000 to be continued in 2001Audi concluded the 2000 financial year with record salesrevenues and unit sales. The successful market launchesof the Audi allroad quattro in May, the Audi RS 4 andAudi A2 in June and the new Audi A4 in November 2000all contributed towards this.
For the 2001 financial year, we expect to see vehiclesales rise further, and anticipate that the sales and earn-ings figures will be roughly on a par with 2000. Audi willin addition be strengthening the international focus ofthe group. Outside Europe, we regard North Americaand China in particular as key markets for the future,and will be stepping up our sales activities there.
Outlook
New models in 2001The Audi A2 1.2 TDI, the first five-door vehicle to use lessthan three litres of fuel per 100 km, will be appearing inthe first half of the year.
The Audi A8 L 6.0 quattro, which extends the modelrange at the top end, will also be launched in the sum-mer of 2001. It has a newly developed, extraordinarilyhigh-performance, high-displacement 12-cylinder en-gine with a W-type configuration.
Record investments over next few yearsUltramodern technology in the car necessitates equallyadvanced production technology. Audi is therefore con-stantly investing high amounts in order to keep all sys-tems abreast of the latest technology. Current plans en-visage capital investments to the tune of DM 17 billionby 2005, largely in new products and in the structuralexpansion of our plants.
New approach by Audi to retirement benefitsIn the light of demographic developments, the level of provisions for old age pensions within the group’semployee pension scheme will rise over the next fewyears. Audi is therefore considering ways of reorganis-ing the existing system of pensions.
Management Report 65
Entwicklung des Ergebnisses vor Steuernund der Umsatzrendite vor Steuern
862 1.112 1.684 1.640 1.605
2.000
1.500
1.000
0.500
1996 1997 1998 1999 2000
Ergebnis vor Steuern in Mio. DMAußerordentliche Ergebnisbelastung (Altautorücknahmeverpflichtung)Umsatzrendite vor Steuern in %
Rise in sales revenues to DM 39.0 billionThe financial position of the Audi Group continues toprovide a sound basis for the company’s future develop-ment.
Thanks to the healthy development in sales and thefirst-time inclusion of AUTOGERMA S.p.A. in the con-solidated financial statements of the Audi Group, salesrevenues rose to DM 39,024 (29,624) million. Excludingthe new Italian subsidiary, sales revenues would havetotalled DM 32,089 million – an increase of 8.3 percent.
The model making the highest contribution towardssales revenues was the Audi A6, which brought in DM 9.7(8.2) billion. The Audi A4 accounted for DM 9.3 (9.4) bil-lion, sales revenues for the A3 amounted to DM 4.2 (4.3)billion, followed by the Audi TT, which generated salesrevenues of DM 3.0 (2.4) billion. A8 sales revenuesamounted to DM 1.2 (1.3) billion. The Audi allroad quattro,launched in May 2000, and the new Audi A2 also con-tributed towards the rise in sales revenues.
Manufacturing costs rose by 33.9 percent in the yearunder review, and therefore by a slightly higher rate thansales revenues, reaching DM 35,241 (26,320) million.This increase is largely attributable to the acquisition
Earnings situation
cost on the part of AUTOGERMA S.p.A. for the purchaseof other Volkswagen Group brand vehicles. The grossmargin, which is the difference between sales revenuesand manufacturing costs, fell to 9.7 (11.2) percent.
Personnel costs rose by 11.0 percent to DM 4,972(4,481) million, one factor behind this change being thelarger workforce in the year 2000. The cost of materialsrose by 43.1 percent to DM 28,418 (19,862) million, inline with higher production output.
In particular as a result of the inclusion of AUTOGERMAS.p.A. in the consolidated financial statements of theAudi Group, selling and distribution costs rose signifi-cantly by 32.2 percent to DM 2,269 (1,716) million. Gen-eral administration expenses totalled DM 329 (281) mil-lion. The improvement in the result for other operatingincome and expenditure to DM 517 (251) million wasprompted by lower expenditure for exchange rate hedg-ing transactions and the liquidation of provisions nolonger required.
The financial result rose to DM 154 (82) million as aconsequence of higher investment earnings.
On the basis of take-back and disposal commitmentsfor scrap vehicles in compliance with the new EU direc-
66 Finance
Development in earnings before taxesand sales return before taxes
862 1,112 1,684 1,640 1,605
2,000
1,500
1,000
0.500
1996 1997 1998 1999 2000
Earnings before taxes, DM millionExtraordinary expenses (commitment to take back scrap cars)Sales return before taxes in %
5.0
251
4.6
6.2
5.5
4.1
tive of October 21, 2000, extraordinary expenses of DM 251 million were incurred in the year under review.
Earnings before taxes were only slightly down onthe previous year, at DM 1,605 (1,640) million. The cor-responding sales return figure was 4.1 (5.5) percent. By contrast, net earnings rose by DM 225 million to DM 859 (634) million.
After the profit transfer to VOLKSWAGEN AG of DM 176 million, there remained a net profit for the peri-od of DM 683 million for the Audi Group – an increaseof DM 271 million on the previous year. We have allo-cated this amount to other revenue reserves.
Result according to DVFA/SG1
The result according to DVFA/SG represents a company’snet profit for the period, adjusted to compensate forspecial factors. The purpose of this reference figure isto reflect the financial strength of a company in as ob-jective a manner as possible, irrespective of the account-ing principles applied in the preparation of its financialstatements. This figure is therefore suitable for draw-ing comparisons between individual periods and be-tween companies. The DVFA result fell by 7.9 percent to DM 867 (941) million, and the result per share wasDM 20.16 (21.89).
1 Based on the recommendations of the working group of theSchmalenbach-Gesellschaft on the statement of changes in financialposition
Finance 67
Key earnings data 1996 1997 1998 1999 2000
Sales return before taxes % 4.6 5.0 6.2 5.5 4.1Sales return after taxes % 1.6 1.6 1.7 2.1 2.2Equity return after taxes % 15.9 17.7 20.2 24.4 27.2Return on employed capital before taxes % 9.6 10.8 14.3 13.5 12.0Return on employed capital after taxes % 3.4 3.6 3.9 5.8 7.1Capital turnover 2.1 2.2 2.3 2.3 2.6
Added value 2000 1999
Source DM million % DM million %Sales revenues 39,024 29,624+ Other income 1,532 990– Expenses prepaid 33,752 24,360
Added value 6,804 100.0 6,254 100.0
Distribution DM million % DM million %Employees 4,972 73.1 4,481 71.7State 767 11.3 1,018 16.3Creditors 206 3.0 121 1.9Transfer of profits to VOLKSWAGEN AG 176 2.6 222 3.5Net profit remaining 683 10.0 412 6.6
Balance sheet structures remain soundThe Audi Group’s course of expansion was also reflectedby the 15.0 percent increase in the balance sheet total,to DM 15,078 (13,110) million.
The asset side rose significantly to DM 8,865 (7,196)million as a result of continuing high investment activity.Capital investments totalling DM 3,965 (2,966) millioncompared with depreciation and net disposals amount-ing to DM 2,296 (2,325) million. The rejuvenation andexpansion of the model range once again accounted forthe bulk of spending on fixed assets in 2000. Goodwilltotalling DM 668 million, reported as an intangible asset,arose in the period under review as a result of the first-time consolidation of Autogerma.
Current assets rose by 5.1 percent to DM 6,213 (5,914)million. In view of the higher sales volume, the widermodel range and, above all, the first-time consolida-tion of AUTOGERMA S.p.A., inventories rose sharplyto DM 2,824 (1,760) million. Raw materials and sup-plies increased to DM 556 (516) million. Inventories as a percentage of the balance sheet total thus rose to18.7 (13.4) percent.
Balance sheet structure
Largely as a result of the acquisition of the Italianimporter Autogerma from own funds, the liquid assetsof the Audi Group in the year under review fell to DM 1,692 (2,953) million.
On the shareholders’ equity and liabilities side,shareholders’ equity, including special items with anequity portion, rose to DM 3,499 (2,819) million. Thisreflected in particular the positive development inearnings. Total reserves, following allocation of the netprofit for the period, rose to DM 3,252 (2,569) million.
The equity ratio rose to 23.2 (21.5) percent.Borrowings were DM 1,288 million higher than in the
previous year, at DM 11,579 million. The precautionarymeasures in connection with the EU Directive on end-of-life vehicles in particular resulted in higher provisionsof DM 7,067 (6,699) million. Higher liabilities, above alltrade payables, resulted in higher borrowings.
The long-term funds available to the company –shareholders’ equity and long-term borrowings –accounted for 39.0 (39.3) percent of the balance sheettotal, consequently covering 66.3 (71.6) percent of fixedassets.
68 Finance
Balance sheet structure Assets Shareholders’ equity and liabilitiesin DM million
1996 1997 1998 1999 2000 2000 1999 1998 1997 1996
3,389
2,824
8,865
15,078
7,5524,154
1,760
7,196
13,110
5,024
1,545
6,114
12,683
4,955
1,268
4,717
10,940
4,770Receivablesand liquidassets
929Inventories
3,869Fixed assets
9,568
1,652
2,375
3,499
15,078
5,679
2,281
2,331
2,819
13,110
5,642
2,465
2,168
2,408
12,683
4,405
2,491
1,875
2,169
10,940
3,825
2,241
1,518
1,984 Shareholders’equity
Long-termborrowings
Medium-termborrowings
Short-termborrowings
9,568
Cash flowCompared with the previous year, cash flow rose byDM 602 million to DM 2,876 (2,274) million. The positiveeffects of higher earnings and higher depreciation wereoffset by the reduction in medium-term and long-termprovisions. Capital investments of DM 3,965 million werecovered by cash flow to 72.5 percent.
Taking into account other internal financing, the in-flow of funds from current business operations totalledDM 2,851 (1,701) million. The outflow of funds from in-vestment activity totalling DM 3,937 (2,890) million andthe transfer of profit to VOLKSWAGEN AG resulted in a decrease of DM 1,261 million in financial resources.These totalled DM 1,692 (2,953) million at the end of thereporting period.
The detailed flow of funds analysis is shown in theNotes to the Consolidated Financial Statements of theAudi Group on page 79.
Finance 69
Key data on internal financing 1996 1997 1998 1999 2000
Cash flow DM million 1,496 1,994 2,373 2,274 2,876Cash flow
+ other internal financing DM million 1,843 2,306 3,365 1,701 2,851Cash flow as percentage
of capital investments % 103.5 101.4 74.9 76.7 72.5
AUDI Aktiengesellschaft
Steady progress in sales by Audi HungariaAudi’s Hungarian subsidiary saw an improvement in all its key data in the past financial year: having passedthe production landmark of one million engines in theprevious year, 1,060,828 engines were built in the yearunder review. The production range comprised 790,148four-cylinder engines, 251,644 six-cylinder engines and19,036 eight-cylinder engines. These were predomi-nantly manufactured for other companies within theVolkswagen Group.
The company’s vehicle production statistics werelikewise impressive: last year saw the completion of the 100,000th Audi TT in Györ. The production total forthe year reached 56,776 (52,579) vehicles, comprising31,064 of the TT Coupé and 25,712 of the TT Roadster.
This positive development in sales prompted a 20.2 percent rise in sales revenues to DM 6,648 (5,531)million. Earnings before taxes mirrored this dynamicexpansion of business: the company recorded earningsof DM 623 million in the past financial year, comparedwith DM 506 million in the prior year.
Capital investments remained high at DM 498 (599)million, with investment measures in the year under
Consolidated companies
review focusing on the long-term positive developmentof the Hungarian subsidiary. The newly completed centrefor near-series engine development typifies the exten-sive investment measures: since last year, the range oftasks performed by Audi Hungaria has included refiningand cultivating the entire engine range, over and aboveits own engine production and vehicle assembly opera-tions.
The company’s positive development and extensiveinvestment measures are ultimately also reflected inthe larger workforce: at the end of 2000, 4,831 (4,312)people were employed at Audi’s Hungarian plant.
Lamborghini now includes AutogermaLamborghini acquired a further company last autumn:ownership of AUTOGERMA S.p.A., of Verona – which im-ports vehicles of the Audi, Seat, Škoda, Volkswagen Pas-senger Car and Volkswagen Commercial Vehicle brands –was transferred in full from Volkswagen Beteiligungs-Gesellschaft mbH to Automobili Lamborghini HoldingS.p.A. All automotive activities in Italy are consequentlynow controlled by a single national holding company.
70 Finance
Consolidated companies within the Audi Group
AutomobiliLamborghini
S.p.A.
Motori MariniLamborghini
S.p.A.
LamborghiniArtiMarca S.p.A.
AUTOGERMAS.p.A.
COSWORTHTECHNOLOGY
LIMITED
AutomobiliLamborghini
Holding S.p.A.
AUDI DO BRASILE CIA.
quattro GmbHAUDI HUNGARIA
MOTOR Kft.
Autogerma’s pride and joy is its large central partsstore, covering a floor area of 51,000 square metres.From there, the company acts as Volkswagen Groupsupplier of over 70,000 different parts to around 800customers in Italy, as well as to the general importers in around 15 countries in Eastern Europe, the Near Eastand North Africa.
In the period under review, Autogerma sold 306,941(300,105) vehicles via the dealer organisation. Theobjective for the next few years is to boost this totalsteadily. Over four million Volkswagen Group vehicleshave been sold in Italy to date. The company generatedsales revenues of DM 8,752 million in the period underreview. The new Audi subsidiary had 624 employees atthe end of the year.
A new departure in Sant’AgataThe new showcase facility at the Lamborghini plant isthe vehicle delivery centre, currently under construction,which will house a showroom, museum, boutique andnew offices. Lamborghini is investing around DM 13 mil-lion in this complex. The new development centre wasoccupied last year. These measures all form part of an
ambitious programme: capital investments totallingsome DM 200 million and spread over the next five yearsare intended to restore the company to profitability inthe medium term. In addition to renewing the produc-tion facilities, new models are to be developed.
The company is pursuing the goal of further strength-ening its pre-eminent position in the sports car segment.Audi is providing both technical and operational sup-port for Lamborghini in this, without encroaching onthe brand’s autonomy.
The vehicle manufacturer Automobili LamborghiniS.p.A. supplied 296 (265) sports cars to customers inthe year under review. The USA is its most importantmarket. The companies within the Lamborghini Grouprecorded sales revenues totalling DM 119 (92) million.Earnings before taxes amounted to DM 73 million. Thisfigure includes income from participations of DM 128million. 440 (380) people were employed at Sant’AgataBolognese at the end of the year.
Finance 71
COSWORTH TECHNOLOGY LIMITEDThe British engine manufacturer responds to the re-quirements of car manufacturers for special drivelinetechnology. The company has now been part of the AudiGroup for more than two years. During this period,fundamental operational measures to integrate it havebeen completed: these include establishing a new man-agement structure, creating and standardising report-ing systems, and integrating the accounting system.Even though this Audi subsidiary is in the midst of aphase of consolidation, the activities of the past finan-cial year are indicative of its bright future.
The Worcester foundry, one of the most modern inEurope, entered “Phase D” of a comprehensive invest-ment programme at the start of 2001.
This phase centres on refining Cosworth’s patentedfoundry process; the “Technology Development Centre”will then be erected in the concluding phase of the ex-tension work. The Worcester plant is also furthering the cause of industrial environmental protection: thefoundry was awarded the environmental certificate ISO 14001 at the start of September 2000.
The Manufacturing Division at Wellingborough hasspecialised in manufacturing small-series engines. It produces mechanically processed cylinder heads andengine blocks, as well as high-performance engines.
Highly qualified engineers and designers at the com-pany’s Northampton headquarters produce completedriveline concepts, from initial drafts of the engine toits application and testing.
At the end of the period under review, COSWORTHTECHNOLOGY LIMITED had 764 (711) employees. Audi’sBritish subsidiary manufactured 4,576 (1,179) completeengines, as well as engine components, and generatedtotal sales revenues of DM 219 (134) million.
quattro GmbHThe customer buying a car in this day and age on theone hand benefits from the rationalisation of volumeproduction, but on the other hand increasingly wants a car that is “one of a kind”. Audi is able to fulfil mostrequests with its diverse range of equipment specifica-tions. Any wishes that remain unfulfilled are the domainof quattro GmbH, a fully owned subsidiary of AUDI AGwhich specialises, among other things, in the custom-isation of Audi models. With its wide range of exclusiveoptions, quattro GmbH satisfies even the most eclecticof preferences.
The spotlight last year was on the launch of the Audi RS 4. This manifestly sporty, high-performancevehicle was developed in conjunction with AUDI AG.Thanks to the high level of demand, over 2,500 of thismodel had been sold by the end of the year. The com-pany’s trading/lifestyle accessories operations werelikewise highly successful.
quattro GmbH recorded sales revenues totalling DM 130 (38) million last year. On the basis of the exist-ing profit transfer agreement, the company transferredDM 38 million to AUDI AG.
72 Finance
Audi share price trend2
EUR
120
100
180
160
140
1996 1997 1998 1999 2000
Highest Quoted price at year end Lowest
Profit transfer and compensatory payment for shareholdersAround 99 percent of the share capital of AUDI AG is heldby VOLKSWAGEN AG. A control and profit transfer agree-ment exists between VOLKSWAGEN AG and AUDI AG:this agreement lays down the level of compensatorypayment to be made to those with small shareholdingsin Audi. These shareholders will receive an amountequivalent to the dividend paid out for the same finan-cial year on one Volkswagen individual share certificate.The Annual General Meeting of VOLKSWAGEN AG to beheld on June 7, 2001 will determine the dividend pay-able for the 2000 financial year.
Audi share price trend2000 was a turbulent year for the German stock market.The German Share Index (DAX) started the year on6,750.76 points and closed at 6,433.61. Audi shares like-wise experienced a roller-coaster ride during the courseof the year. They peaked on November 27 at EUR 75.53.The price at the end of the year was EUR 58.99, com-pared with EUR 63.50 at the start of 2000.
Audi shares
The CDAX Automobile, a sector index for leadingGerman automotive manufacturers and suppliers whoseshares are quoted on the stock market, started the yearon 416.38 points and closed at 339.56, a drop of around18 percent. Audi shares proved largely resistant to thistrend, their price falling by only 7 percent.
Audi Shares 73
Market prices of the Audi share1/2 1996 1997 1998 1999 2000
Highest EUR 50,36 102,21 103,08 85,00 75,53Lowest EUR 24,54 48,11 60,59 56,50 48,50Quoted price at year end (Frankfurt Stock Exchange) EUR 48,57 70,05 74,14 61,00 58,99
1 1996–1998 adjusted at a ratio of 1:10, following introduction of individual share certificates
2 Values for 1996 to 1998 converted into euro for information only
3 Based on the proposal regarding the appropriation of net earnings put forward by the Board of Management of VOLKSWAGEN AG
4 German Association for Financial Analysis and Investment Consultancy/Schmalenbach-Gesellschaft
5 DVFA result according to new method of calculation
Audi share price trend2
EUR
120
100
180
160
140
1996 1997 1998 1999 2000
Highest Quoted price at year end Lowest
Ratios per Audi share1 1996 1997 1998 1999 2000
Compensatory payment2 EUR 0.46 0.61 0.77 0.77 1.003
Compensatory payment and tax credit2 EUR 0.66 0.87 1.10 1.10 1.433
Result acc. to DVFA/SG4 DM 9.37 15.40 19.185 21.895 20.165
Cash flow DM 34.80 46.38 55.19 52.89 66.89Shareholders’ equity DM 46.14 50.44 56.00 65.55 81.37
Balance sheet for the Audi Group as at December 31, 2000
74 Balance Sheet
ASSETS Note 31 Dec. 2000 31 Dec. 1999DM ’000 DM ’000
Fixed assets
Intangible assets 1 740,402 155,763Tangible assets 2 7,683,903 6,653,945Financial assets 3 440,627 386,104
8,864,932 7,195,812
Current assets
Inventories 4 2,824,139 1,759,900Receivables and other assets 5 1,680,816 1,192,786Other securities 6 1,633,159 1,915,414Cash on hand, cash in banks 58,991 1,038,060
6,197,105 5,906,160
Prepaid and deferred charges 15,721 7,661
15,077,758 13,109,633
SHAREHOLDERS’ EQUITY AND LIABILITIES Note 31 Dec. 2000 31 Dec. 1999DM ’000 DM ’000
Shareholders’ equity
Subscribed capital of AUDI AG 7 215,298 215,298Capital reserve 8 110,954 110,954Revenue reserves 9 3,140,958 2,457,934
3,467,210 2,784,186
Special items with an equity portion 10 31,876 34,391
Provisions 11 7,066,892 6,699,125
Liabilities 12 4,504,932 3,591,931
Deferred income 6,848 0
15,077,758 13,109,633
Statement of earnings for the Audi Group
for the 2000 financial year
Statement of Earnings 75
Note 2000 1999DM ’000 DM ’000
Sales revenues 13 39,024,003 29,623,692
Manufacturing costs of products and servicesgenerating sales revenues 14 35,241,142 26,319,325
Gross profit 3,782,861 3,304,367
Selling and distribution expenses 15 2,268,532 1,715,665General administration expenses 329,316 281,335Other operating income 16 1,170,886 780,536Other operating expenses 17 653,499 529,559Participations result 18 +147,548 +68,543Interest result 19 +7,839 +20,566Write-downs of financial assets and of securities classified as current assets 20 1,561 7,143
Results from ordinary business activities 1,856,226 1,640,310
Extraordinary result 21 –251,100 –Taxes on earnings and income 22 746,126 1,006,310
of which charged by VOLKSWAGEN AGDM 648,779 (1,004,749) thousand
Profit transferred as a result of profit transfer agreement 23 176,000 222,000
Net income for the year 24 683,000 412,000
Notes to the financial statements of the Audi Group
for the 2000 financial year
Development of fixed assets
76 Notes
DM ’000 Gross book values
Acquisition or Carry-forward Additions Transfers Disposals Acquisition ormanufacturing for companies manufacturing
cost consolidated costfor first time
1 Jan. 2000 31 Dec. 2000
Intangible assetsConcessions, industrial propertyrights and similar rights and values, as well as licences thereto 60,855 12,764 27,190 2,031 4,081 98,759Goodwill 153,315 – 668,102 – – 821,417
214,170 12,764 695,292 2,031 4,081 920,176
Tangible assetsLand, land rights and buildings, incl. buildings on land owned by others 4,224,923 77,075 321,742 269,733 8,836 4,884,637Technical equipment and machinery 5,582,583 – 498,993 404,744 288,317 6,198,003Other equipment, factoryand office equipment 7,823,060 65,558 1,417,488 256,335 289,072 9,273,369Payments on account and construction in progress 1,157,929 11,052 857,958 –932,843 4,100 1,089,996
18,788,495 153,685 3,096,181 –2,031 590,325 21,446,005
Financial assetsHoldings in affiliated companies 300,574 – 13,897 – – 314,471Loans to affiliated companies 12,413 – 14,517 – 939 25,991Holdings in associated companies 60,186 – – – 12 60,174Participations 5,443 – – – – 5,443Loans to companies linked through participation 56 – – – 17 39Securities – 38,681 – – 10,338 28,343Other loans 9,003 – 1,318 – 2,632 7,689
387,675 38,681 29,732 – 13,938 442,150
Total fixed assets 19,390,340 205,130 3,821,205 – 608,344 22,808,331
Notes 77
Value adjustments Book values
Accumulated Carry-forward Depreciation Transfers Disposals Write-ups Accumulateddepreciation for companies for current depreciation
consolidated yearfor first time
1 Jan. 2000 31 Dec. 2000 31 Dec. 2000 31 Dec. 1999
27,744 10,296 17,513 – 3,915 – 51,638 47,121 33,11130,663 – 97,473 – – – 128,136 693,281 122,652
58,407 10,296 114,986 – 3,915 – 179,774 740,402 155,763
2,297,381 9,551 219,670 1,005 3,506 – 2,524,101 2,360,536 1,927,5424,133,452 – 761,093 571 280,341 – 4,614,775 1,583,228 1,449,131
5,701,636 41,126 1,155,069 –571 275,432 – 6,621,828 2,651,541 2,121,424
2,081 – 322 –1,005 – – 1,398 1,088,598 1,155,848
12,134,550 50,677 2,136,154 – 559,279 – 13,762,102 7,683,903 6,653,945
– – – – – – – 314,471 300,574– – – – – – – 25,991 12,413– – – – – – – 60,174 60,186– – – – – – – 5,443 5,443
7 – – – – 3 4 35 49– – – – – – – 28,343 –
1,564 – 122 – – 167 1,519 6,170 7,439
1,571 – 122 – – 170 1,523 440,627 386,104
12,194,528 60,973 2,251,262 – 563,194 170 13,943,399 8,864,932 7,195,812
General comments on the consolidated balance sheet and the statement of earningsThe consolidated financial statements for the Audi Group have been drawn up in conformity with the requirements ofthe German Commercial Code and the rules laid down in the German Stock Corporation Act.
For the sake of greater clarity and visibility, certain individual items in the balance sheet and statement of earningshave been combined. These items are shown separately in the notes to the financial statements.
The statement of earnings has been prepared according to the cost-of-sales method.The accounting, valuation, disclosure and currency translation methods used in 1999 have in essence been retained.
Any individual changes compared with the previous year are explained in the notes.
Companies included in consolidationFully consolidated group companies fundamentally include all those companies in which AUDI AG holds a direct orindirect interest of more than 50 percent or which are under central management. In addition to AUDI AG, these areAUDI HUNGARIA MOTOR Kft., COSWORTH TECHNOLOGY LIMITED, four companies of the Lamborghini Group and AUDI DO BRASIL E CIA. In the year under review, Automobili Lamborghini Holding S.p.A. acquired AUTOGERMA S.p.A.The Italian company was fully consolidated into the Audi Group for the first time in the year 2000.
As a result of the acquisition and incorporation of AUTOGERMA S.p.A., the scope for comparison between theseannual accounts and the accounts for the previous year is limited. Wherever significant changes in the year under revieware attributable to the consolidation of AUTOGERMA S.p.A., this is specifically indicated under the items in question.
quattro GmbH is included in the consolidated financial statements at equity.On the basis of the control concept pursuant to § 290 Para. 2 of German Commercial Code, Audi Japan K.K. is con-
solidated by VOLKSWAGEN AG. Five foreign subsidiaries and nine domestic companies have moreover not been includedin consolidation. These companies are of only minor significance for the group’s net worth, financial position and earn-ings situation.
Two domestic subsidiaries and one foreign participation upon which AUDI AG exerts a substantial influence are ratedas associated companies and are included at acquisition cost in the consolidated financial statements, in view of theirmarginal value.
A list of the Audi Group’s equity holdings is provided in the Notes, on page 90.
Principles of consolidationThe capital is consolidated according to the purchase method. This means that the acquisition costs are offset againstthe parent company’s proportionate equity capital at the time of acquisition or first-time consolidation.
The assets and liabilities of domestic and foreign companies included in the consolidated financial statements arereported in accordance with the uniform accounting and valuation methods used for the group as a whole. The propor-tionate equity capital in affiliated companies has been calculated on the basis of the accounting and valuation principlesapplied at the respective companies.
Receivables, liabilities, expenses and earnings between consolidated companies have been eliminated. Intra-groupprofits have been eliminated from group inventories and fixed assets.
Where consolidation has an impact on net income, accruals have been made for accumulated tax payments. Whereaccruals have been made for tax liabilities in the course of consolidation, these have been offset against the balance ofdeferred taxes from the individual financial statements; the latter do not appear in the balance sheet, however.
Currency translationFor the consolidated financial statements, the additions to tangible assets in the individual financial statements offoreign subsidiaries and the amounts carried forward for companies being consolidated for the first time are translatedat the average rate for the month of acquisition; depreciation and disposals are shown at the average exchange rates(historical rates) weighted on the basis of the monthly additions.
With the exception of loans, financial assets are reported at the exchange rates at the time of acquisition and con-tinued on this historical basis. Loans are translated at the mean of the buying and selling rate on the balance sheet date.
Other assets and liabilities are valued at the mean of the buying and selling rate on the balance sheet date. Changesin the currency translation differences resulting from exchange-rate movements during the year in progress are bookedto net earnings for the Audi Group.
78 Notes
Average monthly rates are usually applied in the statement of earnings. In a departure from this principle, deprecia-tion of financial assets is performed on a historical basis. The depreciation of tangible assets contained in the manufac-turing costs and functional areas is likewise translated at historical rates. The result for the year for foreign subsidiariesis obtained by translation of the amount in local currency at the rate on the balance sheet date, taking account of theeffect of currency translation on net income for reporting purposes.
The flow of funds analysis reveals the origin and use of the Audi Group’s funds.Cash flow rose to DM 2,876 (2,274) million. The positive effects of the higher result and of higher depreciation were
offset by the reduction in medium-term and long-term provisions.The inflow of funds from current business operations rose to DM 2,851 (1,701) million as a result of the level of other
internal financing. The outflow of funds from investment activities totalled DM 3,937 (2,890) million. Financial resourcesfell by a total of DM 1,261 million.
Notes 79
Flow of funds analysis 31 Dec. 2000 31 Dec. 1999DM ’000 DM ’000
Net earnings before transfer of profits 859,000 634,000Depreciation less write-ups of fixed assets 2,251,092 1,793,944Change in medium and long-term provisions –231,171 –151,281Other expenses and income not affecting payments –2,515 –2,276Cash flow 2,876,406 2,274,387Loss on disposals +16,476 +15,000Change in inventories and receivables –1,560,329 –755,775Change in short-term provisions +598,938 +91,946Change in liabilities +913,001 +75,354Change in other items +6,872 +414Inflow of funds from current operations 2,851,364 1,701,326Outgoings for capital investments1 –3,965,362 –2,965,796Inpayments from asset disposals +28,674 +75,391Outflow of funds from investment activities –3,936,688 –2,890,405Inpayment from capital increase 0 298Transfer of profits to VOLKSWAGEN AG –176,000 –222,000Effective change in funds –1,261,324 –1,410,781Funds at start of period 2,953,474 4,364,255Funds at end of period 1,692,150 2,953,474
1 Less acquisition costs for financial assets (DM 387 million) in preceding years for subsidiaries fully consolidated for the first time in the 1999 financial year.
Intangible assets comprise purchased computer software and licences in such rights and values, as well as subsidies to utility companies. One balancing item booked to assets (goodwill) totalling DM 668 million arose from the first-timeconsolidation of AUTOGERMA S.p.A. during the period under review.
Valuation principlesIntangible assets are capitalised at acquisition cost, taking into account incidental acquisition costs and acquisition costreductions, and depreciated pro rata temporis. Goodwill from the first-time inclusion in the consolidated accounts is de-preciated over a period of five to ten years, starting in the year of first-time consolidation.
Valuation principlesTangible assets are valued at acquisition or manufacturing cost, less depreciation.
Acquisition cost comprises purchase price, incidental acquisition costs and acquisition cost reductions. Tangiblefixed assets invoiced in foreign currencies are valued through translation at the mean of the buying and selling rateapplicable on the date of invoicing.
In the case of self-produced assets, in addition to the directly attributable cost of materials and personnel costs,manufacturing cost also comprises the material overheads and production overheads that must be capitalised for taxpurposes, including proportionate depreciation. Interest on borrowings is not taken into account.
Regular depreciation on tangible assets is charged using either the straight-line method or – to the extent permissibleunder tax laws – the declining-balance method. A scheduled changeover is made from the declining-balance method tothe straight-line method as soon as the latter produces higher levels of depreciation. Depreciation of depreciable assetsis dated from their acquisition or completion.
The full yearly rate of depreciation was made on movable assets in Germany acquired in the first half of the year, and the half-yearly rate on those acquired in the second half of the year.
Low-value assets are fully expensed in the year of acquisition.Opportunities for special depreciation for tax purposes are utilised to the full. Differences in comparison with depre-
ciation according to commercial law resulting from increased deductions under § 7 d of the Income Tax Act (environmentalprotection) as well as from special depreciation under § 82 d of the Income Tax Directive (research and development) andpursuant to § 6 b of the Income Tax Act (transfer of capital gains) are shown under special items with an equity portion.
Notes to the balance sheet
80 Notes
1 Intangible assets 31 Dec. 2000 31 Dec. 1999DM ’000 DM ’000
Concessions, industrial property rights and similar rights and values, as well as licences thereto 47,121 33,111Goodwill 693,281 122,652
740,402 155,763
2 Tangible assets 31 Dec. 2000 31 Dec. 1999DM ’000 DM ’000
Land, land rights and buildings, incl. buildings on land owned by others 2,360,536 1,927,542Technical equipment and machinery 1,583,228 1,449,131Other equipment, factory and office equipment 2,651,541 2,121,424Payments on account and construction in progress 1,088,598 1,155,848
7,683,903 6,653,945
Our depreciation plan is based for the most part on the following estimates of useful lives:Buildings (excluding plant fixtures) 25–30 yearsPlant fixtures 8–30 yearsProduction machinery 5–10 yearsOther equipment, factory and office equipment, including special tools, jigs and fixtures 3–10 years
The increase in the case of affiliated companies relates almost exclusively to AUDI SENNA Ltda. The loans to affiliatedcompanies totalling DM 25,991 thousand represent funds contributed substantially by members of the company’s work-force to the time “bond” scheme. These funds are invested by AUDI AG in VOLKSWAGEN AG special funds. The securities originate from AUTOGERMA S.p.A.
Valuation principlesHoldings in affiliated and associated companies, where they are not valued using the equity method, and also participa-tions, are shown at acquisition cost or the lower applicable value.
Additions to financial assets in foreign currency are translated at the mean of the buying and selling rate on the dayof the transaction. Interest-free and low-interest loans are stated in cash value on the basis of an annual interest rate of7 percent.
AUTOGERMA S.p.A. contributed DM 841 million to the increase in finished goods and merchandise.
Valuation principlesRaw materials and supplies are stated at updated average acquisition cost or at the lower replacement value. Materialsinvoiced in foreign currencies are valued on the day of the transaction using regularly adjusted fixed exchange rates.
Incidental acquisition costs and acquisition cost reductions are taken into account as appropriate.
Notes 81
3 Financial assets 31 Dec. 2000 31 Dec. 1999DM ’000 DM ’000
Holdings in affiliated companies 314,471 300,574Loans to affiliated companies 25,991 12,413Holdings in associated companies 60,174 60,186Participations 5,443 5,443Loans to companies linked through participation 35 49Securities 28,343 –Other loans 6,170 7,439
440,627 386,104
4 Inventories 31 Dec. 2000 31 Dec. 1999DM ’000 DM ’000
Raw materials and supplies 556,023 515,557Work in progress 563,964 522,085Finished goods and merchandise 1,704,152 722,258
2,824,139 1,759,900
19.7
20.060.3
Raw materialsand supplies
Work inprogress
Finished goods and merchandise
31 Dec. 2000%
29.3
29.7
41.0
Raw materialsand supplies
Work inprogress
Finished goods and merchandise
31 Dec. 1999%
In the case of work in progress and finished goods, which are valued at manufacturing cost, direct materials are like-wise included on the basis of average acquisition cost. The values given also comprise direct personnel costs, togetherwith other costs which must be capitalised under tax law. Interest payments on borrowings are not included.
Company cars are depreciated at a rate permissible under tax regulations on the basis of their anticipated useful life.Merchandise is valued at acquisition cost.
Provision has been made for all discernible storage and inventory risks by way of value adjustments. In this, work inprogress and finished goods, as well as merchandise, are valued loss-free as soon as the values derived from the salesmarket are lower than the acquisition or manufacturing costs.
Valuation principlesReceivables and other assets are stated at their nominal value or at acquisition cost. Provision is made for discernibleone-off risks and general credit risks in the form of appropriate value adjustments. Receivables in foreign currencies arevalued at the mean of the buying and selling rate on the balance sheet date.
6 Other securitiesThis item comprises capital-market instruments and shares in special securities funds.
Valuation principlesSecurities are valued at acquisition cost or the lower applicable value on the balance sheet date.
7 Subscribed capitalThe capital stock totals DM 215,297,766.40 or EUR 110,080,000. It is divided into 43,000,000 bearer shares.
8 Capital reserveThe capital reserve consists of premiums on the issue of company shares. As at December 31, 2000, it was unchanged at DM 111 million.
82 Notes
5 Receivables and other assets 31 Dec. 2000 31 Dec. 1999DM ’000 DM ’000
Trade receivables 692,746 388,756of which amounts due in more than one year DM 1,031 (289) thousand
Receivables from affiliated companies 477,936 397,882of which trade receivables DM 270,534 (341,950) thousand
Receivables from companies linked through participation 101,890 33,210of which trade receivables DM 91,481 (33,210) thousand
Other current assets 408,244 372,938of which amounts due in more than one year DM 61,555 (600) thousand
1,680,816 1,192,786
The net income for the year of DM 683 (412) million has been allocated to other revenue reserves.
Other provisions relate for the most part to warranty claims cover, costs arising in connection with the obligation todispose of scrap cars in conformity with the EU Directive on end-of-life vehicles, selling/distribution expenses and work-force-related costs, as well as legal expenses and product liability risks. Provisions also exist for risks arising on pendingtransactions and from purchasing and development commitments, as well as for repair backlogs to be cleared in thefirst three months of the following financial year.
In 2000, in a change from the previous year, no use was made of the option to report certain items in the balancesheet pursuant to § 249 Para. 2 of the German Commercial Code.
Valuation principlesProvisions have been set up according to sound commercial judgement and cover all risks from anticipated claimswithin this context.
Provisions for pensions have been created on the basis of § 6 a of the Income Tax Act using the going-concern valuemethod, applying actuarial principles. The Audi Group applies an interest rate of 5 percent for the purpose of calculatingprovisions for pensions.
Provisions for long-service awards have been discounted at a rate of 5.5 percent, taking into account the rules onvaluation for tax purposes and applying actuarial principles.
Provisions for product liability claims in North America have been calculated in US dollars and translated usingupdated average exchange rates, or the higher buying rate on the balance sheet date.
Provisions for warranty claims cover have been created on the basis of previous or estimated claims incurred byvehicles sold.
Provisions for costs resulting from the obligation to dispose of scrap cars in conformity with the EU Directive on end-of-life vehicles cover the residual risk to the Audi Group, taking account of national variations in salvaging costs,including the anticipated proceeds from the sale of scrap materials.
Notes 83
9 Revenue reserves 31 Dec. 2000 31 Dec. 1999DM ’000 DM ’000
Legal reserve 256 256Other revenue reserves 3,140,702 2,457,678
3,140,958 2,457,934
10 Special items with an equity portion 31 Dec. 2000 31 Dec. 1999DM ’000 DM ’000
Adjustment to value of fixed assets in accordance with:§ 7 d of Income Tax Act (environmental protection) 4,505 5,765§ 82 d of Income Tax Directive (research and development) 6,712 7,217§ 6 b of Income Tax Act (transfer of capital gains) 20,659 21,409
31,876 34,391
11 Provisions 31 Dec. 2000 31 Dec. 1999DM ’000 DM ’000
Provisions for pensions and similar obligations 2,185,977 2,031,070Provisions in respect of taxes 53,038 1,872Other provisions 4,827,877 4,666,183
7,066,892 6,699,125
Medium-term liabilities amount to DM 65,649 thousand and relate to other liabilities.
Valuation principlesLiabilities are shown at the amount at which they must be repaid. Liabilities in foreign currencies are valued at the meanof the buying and selling rate on the balance sheet date.
84 Notes
12 Liabilities Due in Due in 31 Dec. 2000 31 Dec. 1999up to 1 year over 5 years
DM ’000 DM ’000 DM ’000 DM ’000Advance payments received 10,219 – 10,219 47,771Trade payables 2,445,015 – 2,463,633 2,077,059Amounts payable to affiliated companies 1,459,430 79,900 1,539,330 1,076,266
of which trade payables (770,273) (–) (770,273) (156,553)Amounts payable to companies linked through participation 257 – 257 364
of which trade payables (257) (–) (257) (364)Other liabilities 425,259 19,203 491,493 390,471
of which taxes (172,583) (–) (172,583) (157,034)of which in respect of social insurance (125,853) (387) (125,853) (118,535)
4,340,180 99,103 4,504,932 3,591,931
The increase in sales revenues resulted principally from the first-time inclusion of AUTOGERMA S.p.A., which accountedfor DM 6,935 million of total sales; the increase in vehicle sales, coupled with higher average sales revenue per vehicle,likewise boosted sales revenues. Vehicle sales accounted for 89 (88) percent of total sales revenues. The Audi A4 andAudi A6 are the models making the highest contributions to sales revenues.
The remaining sales revenues, which accounted for 11 (12) percent of the total, were above all for trade receivablesfrom affiliated companies and miscellaneous sales to third parties.
14 Manufacturing costs of products and services generating sales revenuesThe manufacturing costs of the products sold include expenses relating to the manufacturing sector and to merchandise.This item also comprises research and development costs, warranty costs and changes in adjustments to the value ofinventories.
The sharp increase in the manufacturing costs is attributable to the inclusion of DM 6,356 million for AUTOGERMA S.p.A.
15 Selling and distribution expensesSelling and distribution expenses essentially comprise expenses relating to marketing, sales promotion, advertising,public relations and outgoing freight.
Notes to the statement of earnings
Notes 85
13 Sales revenues 2000 1999DM ’000 Share in % DM ’000 Share in %
Domestic sales 13,235,678 33.9 13,621,514 46.0Europe (excluding Germany) 18,381,902 47.1 11,128,159 37.5North America 5,488,616 14.1 3,757,868 12.7Rest of world 1,917,807 4.9 1,116,151 3.8
of which: Asia/Oceania 1,500,309 3.8 808,599 2.7Africa 215,159 0.6 174,296 0.6Latin America 202,339 0.5 133,256 0.5
Sales outside Germany 25,788,325 66.1 16,002,178 54.0Total 39,024,003 100.0 29,623,692 100.0
33.9
4.9
47.1
14.1
Domestic
Rest of world
North America
Europe(excludingGermany)
Sales revenues by region, 2000%
18.3
23.8
25.0
15.4
6.2
11.3
Other revenues
VW, Seat,Škoda models
Othermodels
Audi A6
Audi A4
Audi A3
Sales revenues by segment, 2000%
Other income primarily comprises income from passed-on costs, profits from current accounts held in foreign currenciesand income from recourse claims.
17 Other operating expensesThe largest item included in other operating expenses is expenses for transactions in foreign currency.
Income from profit transfer agreements relates to quattro GmbH. Income from participations relates above all to profitshares from Volkswagen Transport GmbH & Co. OHG and FAW-Volkswagen Automotive Company Ltd.
The interest result contains expenses from the sale of non-interest-bearing receivables (factoring) to the VW Groupcompany Coordination Center Bruxelles. Profits and losses from the sale of securities are likewise shown here. The inter-est result was influenced by the lower volume of assets invested as a result of the higher level of investment activity.
20 Write-downs of financial assets and of securities classified as current assetsWrite-downs of financial assets and of securities classified as current assets results from the lower applicable values on the balance sheet date.
21 Extraordinary resultIn the year under review, the net earnings of the Audi Group were diminished by expenses totalling DM 251 million tocover the financial risk from the obligation to take back scrap vehicles in accordance with the EU Directive on end-of-lifevehicles.
86 Notes
18 Participations result 2000 1999DM ’000 DM ’000
Income from profit transfer agreements 37,713 –Income from participations 109,835 45,548
of which from affiliated companies DM 87,026 (34,983) thousandExpenses for participations in affiliated companies – 3,039Other income from participations – 53,070Expenses from the transfer of losses – 27,036Net income 147,548 68,543
19 Interest result 2000 1999DM ’000 DM ’000
Income from long-term loans 3,922 868Other interest and similar income 209,839 141,137
of which from affiliated companies DM 38,060 (17,279) thousandInterest and similar expenses 205,922 121,439
of which to affiliated companies DM 159,030 (108,556) thousandNet income 7,839 20,566
16 Other operating income 2000 1999DM ’000 DM ’000
Liquidation of special items with an equity portion 2,515 2,274Liquidation of provisions 406,430 208,246Other income 761,941 570,016
1,170,886 780,536
22 Taxes on earnings and incomeTaxes on earnings and income include taxes passed on by VOLKSWAGEN AG on the basis of the single-entity relationshipbetween the two companies for tax purposes, along with taxes owed by AUDI AG and its consolidated subsidiaries.
Operating taxes totalling DM 21 (12) million are allocated to manufacturing costs, selling and distribution expensesand general administration expenses; they are not shown under other taxes.
Net earnings for the yearPrior to the transfer of profits to VOLKSWAGEN AG and appropriations to other revenue reserves, net earnings for theyear came to DM 859 (634) million.
23 Profit transferred as a result of profit transfer agreementPursuant to the profit transfer agreement with AUDI AG, an amount of DM 176 (222) million was transferred toVOLKSWAGEN AG.
The distributable profit was the same for the group and for AUDI AG. Differences arising on consolidation have beenoffset within the group’s revenue reserves.
Factors influencing net earnings for the year and future tax chargesThe expenses to be allocated to other financial years total DM 379 (122) million, of which DM 53 (75) million representaperiodic allocations to provisions. This compares with aperiodic income totalling DM 478 (320) million. The latteramount includes income from the liquidation of provisions totalling DM 406 (208) million.
The application of tax regulations has had only a minor impact on the group results for 2000. Future charges relatingto taxes on earnings (in certain circumstances passed on by VOLKSWAGEN AG) are expected to correspond to slightlymore than one-third of the total amount of the tax concessions claimed, principally the special items with an equityportion.
Notes 87
24 Determination of distributable profit 2000 1999DM ’000 DM ’000
Net income for the year 683,000 412,000Transfer to other revenue reserves 683,000 412,000Distributable profit – –
The activities of the Audi Group have been divided into the segments AUDI AG, AUDI HUNGARIA MOTOR Kft.,COSWORTH TECHNOLOGY LIMITED, the Lamborghini Group, and AUTOGERMA S.p.A.
The AUDI AG segment accounts for the bulk of the activities of the Audi Group. The segments AUDI AG and theLamborghini Group develop, produce, assemble and sell cars and engines.
The segment AUDI HUNGARIA MOTOR Kft. relates to the production and assembly of engines and cars.The segment COSWORTH TECHNOLOGY LIMITED develops, builds and assembles engines and vehicle components.The segment AUTOGERMA S.p.A. – a new inclusion in the Audi Group – imports and sells vehicles of the Audi, Seat,
Škoda, Volkswagen Commercial Vehicle and Volkswagen Passenger Car brands to dealers in Italy.The individual figures in the segment reports are based on the group-wide accounting and valuation principles,
and not on the individual financial statements which were prepared in accordance with the legal requirements in eachspecific country.
Segment reports
88 Notes
External sales revenues Sales to other segments Sales overall2000 1999 2000 1999 2000 1999
DM million DM million DM million DM million DM million DM millionAUDI AG 28,369 27,942 3,108 1,209 31,477 29,151AUDI HUNGARIA MOTOR Kft. 1,644 1,510 5,011 4,029 6,655 5,539COSWORTH TECHNOLOGY LIMITED 140 81 69 27 209 108Lamborghini Group 119 91 0 1 119 92AUTOGERMA S.p.A. 8,752 – 0 – 8,752 –Miscellaneous, consolidations 0 0 –8,188 –5,266 –8,188 –5,266Audi Group 39,024 29,624 0 0 39,024 29,624
Earnings before taxes Cash flow Capital investments2000 1999 2000 1999 2000 1999
DM million DM million DM million DM million DM million DM millionAUDI AG 974 1,411 1,777 1,735 3,667 2,397AUDI HUNGARIA MOTOR Kft. 505 411 909 642 498 599COSWORTH TECHNOLOGY LIMITED –20 –50 5 –33 25 51Lamborghini Group 731 –37 84 –20 987 18AUTOGERMA S.p.A. 98 – 96 – 8 –Miscellaneous, consolidations –25 –95 5 –50 –1,220 –99Audi Group 1,605 1,640 2,876 2,274 3,965 2,966
1 Including income from participations for AUTOGERMA S.p.A. amounting to DM 128 million
Contingent liabilitiesA contingent liability amounting to DM 7 (8) million existed on December 31, 2000 in respect of the creation of collectivecharges on real estate to secure non-company liabilities from the long-term rental of a warehouse.
Other financial obligationsObligations not shown in the balance sheet and arising from rental and leasing contracts with terms of several yearsamount to DM 99 (118) million. Of this amount, DM 5 (7) million relate to affiliated companies.
Total obligations resulting from rental and leasing agreements with a term of several years are made up as follows:short-term obligations DM 49 (55) million; medium-term obligations DM 44 (54) million, and long-term obligations DM 6 (9) million.
Commitments arising from capital investment projects are well within the bounds of standard business practice.
Other particulars
Notes 89
Cost of materials 2000 1999DM ’000 DM ’000
Raw materials and supplies, purchased goods 26,583,247 18,253,953Purchased services 1,835,217 1,607,990
28,418,464 19,861,943
Personnel costs 2000 1999DM ’000 DM ’000
Wages and salaries 4,028,308 3,599,902Welfare contributions and pension costs 943,340 880,953
of which in respect of pensions DM 238,660 (224,858) thousand4,971,648 4,480,855
Average workforce 2000 1999
Group companies in Germany 43,118 40,736Group companies outside Germany 6,278 5,064Total 49,396 45,800
of which apprentices 1,441 1,474
90 Notes
Statement of interests held by the Audi Group at December 31, 2000
Name and registered office of company Shareholders’ Earningsequity
Capital share, % DM ’000 DM ’000I. Parent company
AUDI AG, Ingolstadt 2,501,310 352,0001
II. SubsidiariesA. Fully consolidated companies:
AUDI DO BRASIL E CIA., Curitiba (Brazil) 100.00 174,467 –25,309AUDI HUNGARIA MOTOR Kft., Györ (Hungary) 100.00 2,466,422 622,907Automobili Lamborghini Holding S.p.A.,Sant’Agata Bolognese (Italy) 100.00 1,108,792 –8,301
Automobili Lamborghini S.p.A.,Sant’Agata Bolognese (Italy) 100.00 50,913 –53,966Motori Marini Lamborghini S.p.A.,Sant’Agata Bolognese (Italy) 100.00 684 –3,968Lamborghini ArtiMarca S.p.A.,Sant’Agata Bolognese (Italy) 100.00 4,982 –382AUTOGERMA S.p.A., Verona (Italy) 100.00 322,164 63,105
COSWORTH TECHNOLOGY LIMITED,Northampton (Great Britain) 100.00 154,455 –26,364
B. Companies consolidated at equity:quattro GmbH, Neckarsulm 100.00 196 0
C. Companies not included in consolidation:Audi Japan K.K., Tokyo (Japan) 100.00 80,639 7,546Audi Synko GmbH, Ingolstadt 100.00 15,020 156Audi Vertriebsbetreuungsgesellschaft mbH, Ingolstadt 100.00 2,379 2,184AUTO UNION GmbH, Ingolstadt 100.00 991 271Cosworth Technology, Inc., Novi (USA) 100.00 6,489 –3,931NSU GmbH, Neckarsulm 100.00 435 170RACING TECHNOLOGY NORFOLK LIMITED, Norfolk (Great Britain) 100.00 10,882 1,970ZERAL Verwaltung GmbH & Co. Bissendorf KG, Munich 95.00 48 0Audi Zentrum Hannover GmbH, Hanover2 77.00 – –AUDI SENNA Ltda., São Paulo (Brazil) 51.00 27,407 14,406Volkswagen Group Singapore Pte. Ltd., (Singapore)3 49.00 40,809 138Audi Akademie, Gesellschaft für Personal- und Organisationsentwicklung mbH, Ingolstadt 44.50 911 148Design Center Europe S.L., Sitges (Spain) 33.33 10,428 1,614Fahr- und Sicherheitstraining FuS GmbH, Ingolstadt 27.45 115 1,534Volkswagen Transport GmbH & Co. OHG, Wolfsburg 19.00 1,000 171,792
III. Associated companies (not consolidated)LGI Logistikzentrum im Güterverkehrszentrum Ingolstadt Betreibergesellschaft mbH, Ingolstadt 50.00 650 33GIF Gewerbe- und Industriepark Bad Friedrichshall GmbH, Bad Friedrichshall3 30.00 2,093 –5FAW-Volkswagen Automotive Company, Ltd., Changchun (China) 10.00 1,587,402 592,538
1 Before the transfer of profits (DM 176 million) to VOLKSWAGEN AG2 Information unavailable3 1999 financial year
The figures for foreign participations have been translated into DM at the mean of the buying and selling rate on the day of the transaction.
Details of the Board of Management and Supervisory BoardThe members of the Board of Management and Supervisory Board, together with details of their membership of othersupervisory boards and regulatory bodies – pursuant to §§ 285 Sentence 1, No. 10 of the German Commercial Code and125 Para. 1, Sentence 3 of German Stock Corporation Law – are indicated in the Notes to the Financial Statements ofAUDI AG.
The remuneration of members of the Board of Management for the 2000 financial year came to DM 12,404 (11,490)thousand.
Payments to former members of the Board of Management or their surviving dependants amounted to DM 1,777(1,860) thousand. Pension commitments to former members of the Board of Management and their surviving dependantsare covered by provisions totalling DM 20,321 (22,160) thousand. The remuneration of the Supervisory Board amountedto DM 304 (170) thousand.
Ingolstadt, February 8, 2001
The Board of Management
Notes 91
We have examined the consolidated financial statements and the group management report compiled by AUDI AG for thefinancial year from January 1 to December 31, 2000. The preparation of the consolidated financial statements and groupmanagement report in accordance with the requirements of German commercial law and the supplementary regulationscontained in the articles of incorporation is the responsibility of the company’s Board of Management. Our task is topass judgement on the consolidated financial statements and group management report on the basis of our audit.
We have carried out our audit of the annual financial statements in accordance with § 317 of German CommercialCode, observing the principles of proper auditing as laid down by the German Institute of Auditors (IDW). These princi-ples state that an audit shall be planned and conducted such that it is possible to identify with sufficient accuracy anymisrepresentations and violations which have a significant impact on the representation of the company’s net worth,financial position and earnings situation in the consolidated financial statements, based on the principles of properaccounting, and in the group management report. The scope of the audit was determined on the basis of knowledge ofthe business activities and the economic and legal context of the group, as well as the likelihood with which particularerrors were to be expected. In the context of the audit, the effectiveness of the internal controlling system and evidenceof the details provided in the consolidated financial statements and group management report are examined predomi-nantly through random checks. The audit encompasses an assessment of the annual financial statements of the com-panies included in the consolidated financial statements, and also of the scope of the reporting entity, the accountingand consolidation principles and key judgements made by the Board of Management; it in addition includes an appraisalof the overall presentation of the consolidated financial statements and group management report. We are of the opinionthat our audit constitutes a sufficiently reliable basis.
No objections are made on the basis of our audit.We are convinced that the consolidated financial statements present, in compliance with adequate and orderly
accounting principles, a true and fair view of the net worth, financial position and earnings situation of the group. The group management report as a whole provides an accurate picture of the group’s position and of its future risks.
Hanover, February 8, 2001
PwC Deutsche Revision AktiengesellschaftWirtschaftsprüfungsgesellschaft
Gadesmann TrefflerIndependent auditor Independent auditor
Independent auditors’ report
92 Independent Auditors’ Report
Audi Group in Figures1
Audi Group in Figures
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
Production 2 Cars 451,265 492,085 340,956 352,589 446,808 491,501 557,777 619,030 626,059 650,850
Engines 645,485 689,175 494,436 544,538 607,175 620,603 763,928 1,241,351 1,266,896 1,187,666
Vehicle sales Cars 448,309 472,685 357,521 376,180 447,855 492,046 546,436 599,509 634,973 919,621
Germany Cars 227,525 228,246 163,752 160,803 204,138 217,858 238,735 244,127 257,686 239,708
Outside Germany Cars 220,784 244,439 193,769 215,377 243,717 274,188 307,701 355,382 377,287 679,913
Sales outside Germany % 49.2 51.7 54.2 57.3 54.4 55.7 56.3 59.3 59.4 73.9
Market share, Germany % 5.4 5.7 5.3 5.2 6.2 6.1 6.8 6.5 6.8 6.9
Sales revenues DM million 14,814 16,736 12,554 13,456 16,678 18,807 22,410 27,222 29,624 39,024
EUR million 13,918 15,146 19,953
Cost of materials DM million 9,639 11,391 8,263 8,718 10,993 12,448 14,802 18,732 19,862 28,418
EUR million 9,578 10,155 14,530
Personnel costs DM million 2,936 3,094 2,875 2,625 3,037 3,253 3,859 4,130 4,481 4,972
EUR million 2,111 2,291 2,542
Earnings before taxes DM million 756 508 –148 187 589 862 1,112 1,684 1,640 1,605
EUR million 861 839 821
Net earnings DM million 370 172 –89 22 111 302 367 463 634 859
EUR million 237 324 439
Share price (year-end quoted price) 3/4 EUR 22.75 20.45 21.47 23.01 24.54 48.57 70.05 74.14 61.00 58.99
Compensatory payment 3/4 EUR 0.56 0.10 0.10 0.15 0.31 0.46 0.61 0.77 0.77 1.005
Employees Average 38,205 37,738 34,363 32,215 32,823 34,529 37,761 41,011 45,800 49,396
Personnel costs per employee DM 76,841 81,996 83,676 81,480 92,533 94,219 102,194 100,695 97,835 100,649
EUR 51,485 50,022 51,461
Added value DM million 3,733 3,677 2,771 2,863 3,680 4,219 5,097 5,943 6,254 6,804
EUR million 3,039 3,198 3,479
Capital investments DM million 1,097 947 784 1,505 865 1,445 1,967 3,168 2,966 3,965
EUR million 1,620 1,516 2,027
Depreciation DM million 765 960 823 914 1,035 889 1,087 1,731 1,847 2,251
EUR million 885 945 1,151
Cash flow 6 DM million 1,233 1,245 948 1,220 1,774 1,496 1,994 2,373 2,274 2,876
EUR million 1,213 1,163 1,471
Fixed assets DM million 2,899 2,872 2,814 3,589 3,351 3,869 4,717 6,114 7,196 8,865
EUR million 3,126 3,679 4,532
Current assets DM million 2,491 2,922 3,260 3,496 5,011 5,699 6,223 6,569 5,914 6,213
EUR million 3,359 3,024 3,177
Balance sheet total DM million 5,390 5,794 6,074 7,085 8,362 9,568 10,940 12,683 13,110 15,078
EUR million 6,485 6,703 7,709
Shareholders’ equity DM million 1,554 1,623 1,521 1,780 1,812 1,984 2,169 2,408 2,819 3,499
EUR million 1,231 1,441 1,789
Liabilities DM million 3,836 4,171 4,553 5,305 6,550 7,584 8,771 10,275 10,291 11,579
EUR million 5,254 5,262 5,920
1 AUDI AG until 1993
2 Incl. Porsche 924/944 (1991), 1993 excl. 4, 1994 excl. 2,021 and 1995 excl. 875 Avant RS2
3 Figures for 1991–1998 converted into euro for information only
4 Figures for 1991–1998 adjusted at ratio of 1:10 following introduction of individual share certificates
5 According to VOLKSWAGEN AG proposal regarding the appropriation of net earnings
6 Modified cash-flow statement as from 1993
AA2 4, 12, 29, 48, 49, 57, 58, 65, 66A3 13, 50, 51, 57, 58, 66A4 4, 10, 46, 47, 48, 50, 57, 58, 59, 65, 66A6 14, 49, 50, 51, 52, 57, 66A8 4, 15, 57, 66A8 long-wheelbase version 15, 49, 50, 58, 65aaa 2000, Berlin 10, 46ADAC crash test 12Added value 67All-aluminium body 12, 15All-aluminium construction technique 29allroad quattro 21, 29, 30, 46, 48, 49, 50, 57, 58, 66“Aluminium/Bodyshell” centre of excellence 29Aluminium engine casting method 25, 60American Le Mans Series 31Apprentices 35Audi Forum Ingolstadt inside front cover, 7, 41 f., 59Audi Group structure 70AUDI HUNGARIA MOTOR Kft. 58, 60, 70Audi Quality Award 32Audi R8 sports racing cars 31AUDI SENNA Ltda., São Paulo 51Audi shares 73Audi Space Frame ASF 12Audi telematics 10August Horch Museum, Zwickau 59AUTOGERMA S.p.A. 4, 48, 52, 57 ff., 60, 66, 68, 70 f.
BBalance sheet 74Balance sheet structure 68 f.Board of Management 4 f.
CCabriolet 57Capital investments 4, 59, 65Cash flow 59, 69, 73Compensatory payment 57, 73Consolidated companies 60 f., 70 ff.Continuously variable automatic transmission see multitronicCost of materials 66COSWORTH TECHNOLOGY LIMITED 25, 58, 59, 61, 72Cultural sponsorship 49, 51, 53
DDesign study 29, 46, 50, 58Dividend see compensatory payment
EEarnings 57, 66 f.e-business 32Eco-Audit and Management Scheme 36Economic developments 56, 65Eight-cylinder turbodiesel engines 4, 60Electronic Stability Program ESP 10, 13, 16, 58Employees 33 ff., 58 f.Engine production 57 f., 60, 70, 72 Environmental protection 36ESP/shaker rig 29EU Directive on end-of-life vehicles 57, 63, 66Euro, company switch to 60European Aluminium Award 29
FFlow of funds analysis 79Fully galvanised body 14
GGeneva Motor Show 46, 58German industry’s award for innovation 12, 29Glyndebourne Festival 53
IInternal financing 69
Index
LLamborghini 52, 60, 70 f.Lamborghini Diablo 6.0 23, 52, 57, 60Le Mans 31, 49Learning stations 35Lightweight design 4, 12Liquidity 68
MManufacturing costs 66Marketing 46 f.Markets 48 ff.Motor sport 31Motor Vehicles Block Exemption Regulation 62multitronic transmission 10, 14museum mobile 36, 41, 42, 59
NNavigation system Plus 10New models in 2001 65New toolshop 29, 59
PParis Motor Show 29, 50, 58Personnel costs 35, 66Production output 57 f., 60, 70, 72Pump-injector system 24, 60Purchasing volume 59
QQualification structure 34 f.quattro 10, 15, 16, 18, 20, 21, 30, 42, 49, 57quattro GmbH 20, 24, 41, 57, 61, 72
RRecycling 36, 63Result acc. to DVFA/SG 67Risk management 62RS 4 20, 24, 25, 48, 57, 58, 61, 65, 72
SS models 18Sailing 53Sales revenues 4, 57, 66Salzburg Festival 53Selling and distribution costs 66Service 47Space Floor Concept 12Sports sponsorship 53Statement of earnings 75Statement of interests 90Steppenwolf 29, 46, 50, 58Summer Concerts 53Supervisory Board 6 f.Suppliers’ award 32
TTDI 10, 12, 13, 15, 21, 24, 42, 57, 65TT Coupé/TT Roadster 16, 17, 49, 57, 58, 60, 66Twelve-cylinder front engine 15, 58, 65
VV6 2.7 litre biturbo engine 18, 20, 21, 25V6 3.0 litre engine 10, 25V8 TDI engine 15, 60V12 6.0 litre engine 23Vehicle safety 10, 12, 13Vehicle sales 4, 48 ff., 58, 60, 61, 65, 71, 72Vocational training concept 35Volume-production aluminium car 4, 12, 58
WW configuration 15, 58, 65
Index
Important dates in 2001
Important Dates in 2001
Annual Press Conference March 20, 2001 Kempinski Hotel, Munich Airport
Annual General Meeting June 28, 2001 Stadttheater Ingolstadt
Interim Report August 2001
AUDI AG
Finance Analysis and Publications
I/FF-12
85045 Ingolstadt
Germany
Telephone +49 (0)8 41 89-4 03 00
Telefax +49 (0)8 41 89-3 09 00
www.audi.com
