Audi extends new car warranty and extended warranty as a goodwill gesture

The extension applies worldwide to all cars produced in Europe, Brazil, Mexico or India whose new car or extended warranty expires or has expired in the time period between 1st March 2020 and 31st May 2020. The period for the extension ends three months after the expiration of the original new car or extended warranty, at the latest on 31st August 2020.

„We are reaching out to our customers in these trying times and are enabling more flexibility in order to organize visits to Audi dealerships”, says Horst Hanschur, Vice President Retail Business Development and Customer Services. “Many of our dealer partners worldwide are still closed or just in the process of opening their doors again. We are therefore making adjustments in a number of areas in order to ensure our customers still have a premium experience with the Audi brand, as well as to ensure the future of our dealerships.”

The mileage restriction of the Audi extended warranty remains unchanged with respect to the warranty extension. If mileage restrictions for new car warranties have been issued in a market, then these also remain unchanged. In the case of an overlap between the extension of the new car warranty and the start of the Audi extended warranty, the start of the extended warranty will be postponed for three months free of charge.

All the above mentioned measures are one-time and voluntary goodwill measures which have been introduced due to the circumstances created by the Covid-19 crisis. These measures are not a recognition of any legal obligation and do not imply any such obligation in the future.

Corona pandemic: AUDI AG takes stock after difficult first quarter

In the context of the corona pandemic, Audi was operating in a highly volatile regulatory and economic environment in the first quarter. The global shutdown had adverse effects along the entire automotive value chain, for example on sales, customer demand and supply-chains stability. “We closed down our production capacities in a controlled manner and in doing so have protected jobs at our sites in Germany thanks to short-time working. The health of our employees and their families has always been and still is our top priority,” said Arno Antlitz, Member of the Audi Board of Management for Finance, China and Legal Affairs. “At the same time, during this phase when the markets are at a standstill, we have succeeded in protecting our liquidity and keeping core processes stable at our company also in the crisis.”

After the car manufacturer had initially started the year 2020 with a tailwind from its model initiative, the spread of the coronavirus and related regulatory measures such as the closure of dealerships and lockdowns from February onwards had an increasingly adverse impact on car deliveries, first in the Chinese market and later in the other core regions as well. Due to the pandemic, deliveries by the Audi brand fell by 21.1 percent in the first three months to 352,993 vehicles (2019: 447,247). The Four Rings thus performed better than the overall market, which contracted by 23.3 percent. The first signs of recovery were already apparent in China towards the end of the first quarter: 100 percent of dealerships there have now reopened. With measures such as online sales of new cars from stock, virtual showrooms and Audi’s live advice, the brand is systematically expanding its digital sales business together with its partners.

In the context of the declining market development, the Audi Group generated revenue of €12,454 million (2019: €13,812 million), with positive effects from the full availability of Audi Q3 models and the market success of the Audi e-tron, as well as from higher revenue from deliveries of parts sets for local production in China. At €483 million, revenue by the Lamborghini brand was at the high level of the prior-year period (2019: €491 million).

Operating profit of €15 million (2019: €1,100 million) reflects not only the decline in demand, but in particular the turbulent situation on the commodity and capital markets caused by the pandemic. In the first quarter, Audi recognized losses on the fair-value measurement of commodity hedges of approximately €0.5 billion and faced headwinds from exchange-rate effects. Operating profit was adversely affected also by expenses for the early-retirement plan under the Audi.Future program. Thanks to further efficiency gains and the greater use of synergies within the Volkswagen Group, Audi was able to reduce its research and development expenditure. The operating return on sales was 0.1 percent (2019: 8.0 percent).

Profit before tax amounted to €545 million (2019: €1,196) million, and was also positively affected by the sale within the VW Group of AEV GmbH. The former Audi subsidiary is now the basis of the Car.Software organization, into which the Volkswagen Group will place the software development activities of all its brands. The organizational focus of the Volkswagen Group’s software subsidiary is to be in Ingolstadt.

The cash inflow from that transaction of €650 million had a positive impact on the liquidity situation. The net cash flow amounted to €952 million in the first quarter (2019: €1,207 million) and net liquidity amounted to €18,792 million at March 31, 2020 (December 31, 2019: €21,754 million). In addition, the company set up a task force at an early stage to optimize cash outflows. “Audi is in a robust financial position. We are systematically reducing our short-term expenditure without compromising Audi’s ability to act and its long-term future capability,” said Arno Antlitz. The company has been pushing forward with important core processes also during the phase of short-time working, for example in the Technical Development and Production divisions, in order to safeguard future market launches and ensure a rapid ramp-up.

After production at the Chinese plants had already been restarted on February 17, 2020 and is now largely back to regular volumes, the European sites have been gradually ramping up again since the end of April 2020. Comprehensive precautions have been taken to protect employees’ health during the restart.

With a view to full-year 2020, against the backdrop of the ongoing corona pandemic, the car manufacturer anticipates negative growth for the global economy and significantly lower demand in worldwide car markets. The Audi Group therefore expects deliveries of the Audi core brand, revenue and operating profit to be significantly below the respective prior-year figures. The net cash flow is expected to be lower than in the previous year.

First Quarter results:
www.audi.com/Quarterly-Report-Q1-2020

Video-Interview with Arno Antlitz, Member of the Board of Management of AUDI AG for Finance, China and Legal Affairs, on the first quarter results:
www.audi.com/Assessment-Q1-2020

Selected key figures of the Audi Group

Q1 2020

Q1 2019

Car deliveries Audi brand

352,993

447,247

Revenue Audi Group in EUR million

12,454

13,812

Operating profit Audi Group in EUR million

15

1,100

Operating return on sales Audi Group in percent

0.1

8.0

Net cash flow Audi Group in EUR million

952

1,207

Net liquidity Audi Group in EUR million

18,792

21,754

Audi brand deliveries to customers

Q1 2020

Q1 2019

Difference
year on year

World

352,993

447,247

-21.1%

Europe

165,403

204,180

-19.0%

– Germany

62,959

76,763

-18.0%

– UK

30,684

41,884

-26.7%

– France

9,169

12,730

-28.0%

– Italy

12,435

16,025

-22.4%

– Spain

10,479

14,289

-26.7%

USA

41,367

48,115

-14.0%

Mexico

2,409

2,914

-17.3%

Brazil

1,480

1,429

+3.6%

Mainland China and Hong Kong

113,330

159,334

-28.9%

Restart of production at Audi in Ingolstadt

Production at Audi’s main plant in Ingolstadt has started up again today on a single assembly line. Due to the corona crisis, production was shut down in a controlled manner in mid-March. The picture shows a section of the assembly line including a separating plastic sheet for safety, where the employees are producing the Audi A3 and Q2 models, initially in single-shift operation. Upstream processes such as press shop, body shop and paint shop gradually started already at the beginning of the week. Approximately 1,500 employees are back at work this week to restart car production in Ingolstadt. 

Audi e-tron Sportback conquers the virtual world

It is the next step in digitalization and virtual experience for the Four Rings: Audi is the first car manufacturer to use “Virtual Market 4,” one of the world’s largest virtual reality events, as a presentation and experience platform for the all-new Audi e-tron Sportback (combined electric power consumption in kWh/100 km* (62.1 mi): 26.3 – 21.6 (WLTP); 23.9 – 20.6 (NEFZ); combined CO2 emissions in g/km* (g/mi): 0).

The Social VR-event created by the Japanese company Hikky will take place for the fourth time in 2020 and attracted more than 710,000 international visitors last year. This year, the organizers expect up to one million participants, who will move through the virtual space called “Para-real Tokyo” as 3D characters and interact with each other. In view of the current situation, “Virtual Market 4” is therefore an ideal format for preparing and flanking the market launch of the Audi e-tron Sportback in Japan and beyond. The model will be launched in Europe in this quarter and will reach dealers in the United States and Asia in the second half of the year.

The Audi e-tron Sportback is parked in “Para-real Tokyo” at selected locations. If a visitor touches the vehicle, he is guided to a very special virtual Audi stand: The Audi booth is a digital recreation of the “Audi Meteorite”, a special e-tron experience facility installed physically at Munich Airport for a limited period from beginning 2019 and in Shanghai in autumn 2019.

Visitors of the digital experience world can not only see the second model of the e-tron family there, but also various features, design and technology will be explained live by Audi avatars. In addition, the “Virtual Market” players have the opportunity to take guided virtual test drives around the Meteorite.

Audi will take part in “Virtual Market 4“ together with 42 other companies and around 1,400 stores.

*Information on fuel/power consumption and CO2 emissions in ranges depending on the chosen equipment level of the car.

Audi realigns its commitment in motorsport

“Audi has shaped the DTM and the DTM has shaped Audi. This demonstrates what power lies in motorsport – technologically and emotionally,” says Markus Duesmann, Chairman of the Board of Management of AUDI AG. “With this energy, we’re going to drive our transformation into a provider of sporty, sustainable electric mobility forward. That’s why we’re also focusing our efforts on the race track and systematically competing for tomorrow’s ‘Vorsprung.’” Formula E offers a very attractive platform for this. To complement it, we’re investigating other progressive motorsport formats for the future.”

Audi looks back on an extremely successful past in DTM. Having scored 23 championship titles, including eleven driver titles, plus 114 victories, 345 podium finishes, 106 pole positions and 112 fastest laps, Audi shaped the DTM from 1990 to 1992 and from 2000 onwards. With three of three possible championship titles, numerous podiums and many other records, 2019 has so far been the most successful DTM season in the company’s history. 

Audi would like to continue these successes in the 2020 season and bid farewell to the DTM fans with a successful title defense in all three championships. “We’re hoping that this currently difficult situation will improve soon and that we’ll still be able to contest a few DTM races this year,” says Member of the Board for Development Hans-Joachim Rothenpieler. “The fans would deserve this, and so would the ITR, our drivers as well as our teams and partners, who will now have adequate advance notice to reposition themselves for the time after 2020. Successful motorsport is – and will continue to be – an important element of Audi’s DNA.”