Audi AG has increased its global sales for the eighth year in a row. Despite a turbulent first half of the year, the company achieved a new record-breaking figure: Around 1,878,100 deliveries represent an increase of 0.6 per cent. The Four Rings sold more than in the previous year in all three core markets in 2017: In the United States, Audi achieved new record-breaking sales month by month and closed the year 2017 with growth of 7.8 per cent. In China, Audi not only managed to offset the poor delivery figures from the first half of the year, but even achieved a cumulative increase of 1.1 per cent in the year-end spurt. In Germany, sales built on the very high level in 2016 with an increase of 0.4 per cent.
“Despite a very challenging situation we achieved positive growth in all core markets in 2017 and achieved a new record-breaking sales result worldwide. Every single market contributed to this outcome. This demonstrates the attractiveness of our product portfolio to our customers,” says Bram Schot, Board Member for Sales and Marketing at Audi AG.
Since June, Audi has managed to return to growth in China, steadily reducing the cumulative year-on-year decline month by month and ultimately achieving a positive sales balance. In the period January through December, the brand increased its deliveries by 1.1 per cent to 597,866 automobiles. With this new all-time high, the company continues to maintain its lead in the Chinese premium market. Following on from its similar achievement in November, China also posted the highest volume growth of any individual market in the last month of 2017. Here the sales figures once again increased sharply, up 34.3 per cent to 69,160 automobiles year-on-year. Never before had so many Chinese customers taken delivery of an Audi in a single month.
Audi of America also achieved another successful year despite the declining overall market. Audi was the only premium manufacturer in the United States to grow steadily in 2017: up 7.8 per cent to 226,511 units. In December 2017, the company also celebrated its 84th record-breaking month in a row (+16.3 per cent to 26,977 units).
With high growth throughout the year, Audi Canada (+17.9 per cent to 36,007 cars) also established itself as a firm fixture among the top ten largest markets.
Despite numerous political and economic uncertainties, sales in Europe rose 0.4 percent to around 860,600 cars. In addition to Germany (+0.4 per cent to 294,544 cars), Italy (+10.5 per cent to 68,954 cars) and France (+3.6 per cent to 63,980) achieved new annual record-breaking figures. The market downturn in the UK had a negative impact on overall results: With 175,217 deliveries and a drop of 1.3 per cent, total Audi sales in the United Kingdom, however, comfortably outperformed the declining overall market.
The global increase in demand for the Q models (+10.8 per cent to around 689,150 cars) was a major factor in the growth of the Four Rings in 2017. More than one out of every three Audi models sold was therefore an SUV. The best-selling Q model in Europe is the Q2. Apart from Germany (23,167 units), other major buyers here included the UK (12,636 units) and Italy (11,068 units). Global sales of the Audi Q3 once again increased in December (+11.3 per cent to around 20,950 cars). In 2017, the most successful member of the Q family was the Audi Q5 with around 281,850 automobiles delivered. The most Audi Q5 models were delivered to the individual market China. The successor model will go on sale at Chinese dealers as a long-wheelbase version in spring 2018. The Audi Q7 also saw sales increase by 3.9 percent in 2017. Since the start of the year, sales of the full-size SUV have increased in North America alone by about a fifth to around 43,800 units.
Audi ordered to recall 127,000 vehicles over emissions
Audi has been ordered to recall 127,000 vehicles after Germany’s KBA motor transport authority detected illicit emissioncontrol software in the automaker’s latest Euro 6 diesel models, German press reports said The recall involves A4, A5, A6, A7 and A8 sedans and Q5 and Q7 SUVs, the German transport ministry told the DPA news agency, confirming a report in Bild am Sonntag.
The recall affects 77,600 vehicles in Germany, Bild am Sonntag reported. The KBA has found that the affected cars’ engine management systems turn off emissions-reducing measures in real-world traffic while allowing them to work on a test bench, the paper said The KBA is threatening to withdraw type approval for the latest generation of Audi’s A8 range-topping sedan, Bild am Sonntag said. Audi said the models had been included in a voluntary recall of 850,000 diesel vehicles with V-6 and V-8 TDI engines announced in July.
“The engine control software for the vehicles in question will be completely revised, tested and submitted to the KBA for approval,” Audi said in a statement. Audi said it has been examining its diesel cars for potential irregularities for months in close cooperation with the KBA.
“As part of this systematic and detailed assessment, the KBA has now also issued a notice regarding Audi models with V-6 TDI engines,” it said. In November, Audi announced a recall of 5,000 cars in Europe for a software fix after discovering they emitted too much nitrogen oxide. Parent Volkswagen Group concealed high NOx emissions from U.S. regulators in its 2015 diesel emissions-rigging scandal.
VW was found to have illegally manipulated engine software so that vehicles would meet NOx emissions standards in laboratory testing but not in real-world conditions, where they could emit up to 40 times the permitted levels. Several Audi models were affected and Audi has been accused in media reports of having devised the so-called defeat devices years earlier but not to have installed them in its vehicles at that time. Audi and Volkswagen have never commented on the matter.
Last month, Audi dissolved the task force it set up to investigate how many of its diesel cars have manipulated software.
Ford caps ‘challenging year’ with 19% decline in Q4 pretax profit
Ford Motor Co.’s fourth-quarter adjusted pretax profits fell 19 percent to $1.7 billion due to higher steel and aluminum prices, as well as adverse currency rates, the automaker said Wednesday.
Ford’s fourth-quarter operating margin was 3.7 per cent, down 2 percentage points from a year earlier.
Net income swung to a gain of $2.4 billion from a year-earlier loss of $800 million, reflecting a lower effective tax rate and pension re-measurement. The year-earlier loss had been due mainly to accounting changes.
Revenue rose 6.7 per cent to $41.3 billion.
For the full year, Ford’s 2017 pretax profits fell 19 per cent to $8.4 billion, slicing its operating profit margin to 5 per cent from 6.7 per cent in 2016. Those declines were caused by a $1.2 billion hit in raw materials costs and a $600 million negative impact from Brexit.
Net income soared 65 percent to $7.6 billion, as revenue rose 3.3 percent to $156.8 billion.
“It was a very challenging year, but also a year of progress,” CFO Bob Shanks told reporters. “It’s very, very clear we have to improve the fitness of the business.”
Ford shares fell 4 percent to close at $11.57 on Thursday.
Ford’s earnings were driven by its North American region, where pretax profits fell 16 per cent to $1.6 billion in the fourth quarter, due to rising commodities and warranty costs plus expenses related to the launch of the Ford Expedition and Lincoln Navigator that Ford attributed to a supplier-related parts shortage that has since been fixed.
The warranty costs include an October recall of 1.3 million F-150 and Super Duty pickups to fix faulty side-door latches that cost the automaker $267 million.
Revenue in North America rose 4.3 per cent to $24.1 billion. For the full year, pretax profits fell 16 per cent to $7.5 billion in North America, even as revenue edged up 1 per cent to $93.5 billion.
As a result, Ford’s roughly 54,000 UAW-represented employees will get profit sharing checks of $7,500 on average. That’s down from the $9,000 they received last year.
In Europe, Ford’s pretax profit slid 66 percent to $56 million in the fourth quarter and tumbled 81 per cent to $234 million for 2017. Most of the full-year drop was attributed to Brexit-related charges, as well as higher commodity and warranty costs.
In South America, Ford’s pretax loss narrowed to $197 million in the fourth quarter, from a loss of $293 million a year earlier. For 2017, its pretax loss in the region narrowed to $784 million, from a loss of $1.11 billion in 2016.
In the Middle East and Africa, pretax losses narrowed slightly to $70 million in the fourth quarter from $71 million a year earlier, and to $263 million for the full year from $299 million a year earlier.
Pretax profits at Ford’s Asia Pacific business unit collapsed 98 percent, to $5 million in the fourth quarter from $284 million a year earlier, largely due to a sales drop in China. For the full year, pretax profits there slipped 11 percent to $561 million.
Ford Motor Credit Corp.’s fourth-quarter pretax profit jumped 53 percent to $610 million, and its full-year pretax earnings rose 23 percent to $2.3 billion.
Ford last week lowered its 2018 forecast for what CEO Jim Hackett characterized as a “bad year.” Its per-share guidance for 2018 translates to earnings of $8 billion to $9.2 billion, according to investment firm Barclays Capital, down from an initial forecast of $9.9 billion.
Shanks, speaking last week, said the company will face about $1.6 billion in increased commodities costs, including steel and aluminum.
Shanks said most of that impact will come from rising steel costs, and that aluminum represents just 25 percent of that negative impact. Ford’s crosstown rivals, including General Motors and Fiat Chrysler, have not highlighted commodities as a financial concern.
Adding to the financial woes are the company’s mobility investments, which were about a $300 million drag on earnings in 2017, the first year in which they’ve been broken out separately. Executives said mobility losses would be larger in 2018.
Shanks said that Ford isn’t as fit as its peers, and that is stopping it from achieving its desired profit margins of around 8 percent.
“We’re not able to get the same level of margins others may be able to,” Shanks said. “That shows the gap we need to address.”
Executives have said that Ford has started to implement business practices that should begin to bear fruit in 2019 and beyond, focused around Hackett’s mantra of “smart vehicles for a smart world.”
Those include $14 billion in costs cuts, simplifying orderable products, and tailoring its model lineup to higher-margin segments for different parts of the world.
European sales of greener cars jumped 39% in 2017
European sales of cars powered by alternative powertrains rose 39 per cent last year as Toyota pushed hybrid models and Renault extended the driving range on the latest version of its battery-powered Zoe.
Customers in European Union and EFTA markets bought 953,355 autos that run on systems including batteries, electric-gasoline or electric-diesel motors, fuel cells or natural gas in 2017, the Brussels-based European Automobile Manufacturers’ Association, or ACEA, said Thursday in a statement.
Combined demand for plug-in hybrids, which can operate on either conventional fuel or self-charged battery power, and so-called mild hybrids, which use an electric motor to help the combustion engine run more efficiently, surged 52 per cent to 460,418. Sales of full-electric models jumped 49 per cent to 135,369.
The growth far outpaced the European car market’s 3.3 per cent gain last year, suggesting consumers are warming to the models added by Toyota, Renault and competitors. Still, the alternative systems powered only 6.1 per cent of the 15.6 million autos sold across the region last year, an increase from 4.5 per cent in 2016. Battery-powered cars had a 0.9 per cent market share in 2017.
EU regulators are requiring the auto industry to reduce CO2 emissions from vehicle exhausts to limit greenhouse gases. Customers have been reluctant to buy full-electric autos because of concerns about how long battery recharging takes and the short distances the cars can travel compared with gasoline or diesel models.
Renault improved the Zoe’s range on a full charge by 67 per cent to 400km (250 miles). Toyota has up to now focused on hybrid technology, and it said in January that sales of the models jumped 38 per cent in Europe last year to account for 41 per cent of its deliveries in the region.
Sales of full-electric cars in Europe are set to surge to 200,000 this year, LMC Automotive predicts, with demand for battery-powered vehicles forecast to reach 600,000 by 2020 and rise to nearly a million by 2022
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