Increasing costs with factories and models have had a negative effect on Audi’s Q3 profit. In the third quarter of 2013, profit as a proportion of sales was of 9.4 percent but this year it went down to 9.2 percent since the money made by selling cars was offset by increasing investment in new models and plants.
It should be mentioned Audi is investing more than €1 billion on its newly established factories in Brazil and Mexico which could lead to the unprecedented situation of selling more cars outside homeland Germany. The bigger plan for Audi is to spend a whopping €22 billion through 2018 on plants, models as well as for researching new technologies.
Audi said this plan may shrink the company’s operating margin from 11 percent in 2012, 10.1 percent in 2013 to as low as 8-10 percent. Audi’s Q3 profit had a lot to do with increasing sales of the Q5 and A6 which have allowed the company to boost quarterly sales by 7 percent to 429,295 units. Nevertheless, Mercedes-Benz is closing in on Audi as the sales gap between the two has been reduced from 118,110 cars at the end of September 2013 to 103,494 vehicles after nine months so far this year.