Audi Group posts record profits despite global sales dip

The Audi Group was able to boost revenues by 6.2% year on year in 2021, despite a drop in global deliveries as a result of the semiconductor shortage. The group – which comprises Audi, Lamborghini, Ducati and (as of January 2022) Bentley – posted revenues of €53.1 billion (£44.51bn), with a record operating profit of €5.5 billion (£4.61bn). That's despite global deliveries dipping by 5.0% in light of reduced production capacity. The record margins are attributed by the group to "the good residual value situation, cost discipline and momentum from raw material hedges and currency effects", as well as a 10.4% return on sales stemming from "strong pricing" strategies. Strong sales from Lamborghini and Ducati were important contributors to the financial results. Lamborghini delivered a record 8405 cars last year – up 13.1% over 2020 – of which 5021 were the Lamborghini Urus SUV, while motorbike manufacturer Ducati had its best year on record, with 59,214 bikes sold. Lamborghini's revenues soared by 19% to €1.95bn last year (£1.65bn) and an operating margin of 20.2% represents a more than a 100% increase over 2018. Bentley's record 2021 results have already been announced and are not included in Audi AG's 2021 report because the British company was integrated at the beginning of 2022. The Audi Group acknowledged that the semiconductor shortage had wide-reaching impacts on its global production and retail operations. The four brands produced a total of 1,688,978 vehicles in 2021, down from 1,700,258 in 2020. Audi itself accounted for the vast majority of these deliveries but reported a decline of 0.7%. Production across the group in the first six months ramped up by 35.2% in the wake of a succession of pandemic-induced lockdowns, but as the chip shortage took hold in the second half of the year, volumes fell by 32.6%. "The persistent semiconductor scarcity led to production downtime despite intensive control measures, so the continued high demand in the second half of the year wasn’t able to be fully met," the brand said. The Audi Q5 SUV remains the group's best-selling car globally, accounting for 293,069 units (a 5.3% rise), followed closely by the Audi Q3, Audi A6, Audi A4 and Audi A3. Its two slowest-selling cars were the Audi TT and Audi R8 sports cars, with 8714 and 1887 units sold respectively. This year is expected to be the final year of sales for each of these models in their current forms. Audi also revealed that deliveries of pure-electric models climbed by 57.5% in 2021, with 81,894 sold globally to account for 4.9% of the company's overall sales. Looking ahead to 2022, the group has expressed confidence in strong results on the basis that it has "well-filled" order books and "continued high demand". It also cites a predicted improvement in the supply chain shortages, which should help to boost deliveries by 100,000-200,000 units and revenues to €62bn-€65bn (£52bn-£54bn) – a substantial increase. However, the firm also said: "The concrete effects of the war in Ukraine cannot yet conclusively be estimated with regard to the global economy, the industry's growth and the Audi Group's earnings, finances and assets." The company forecasted its 2022 performance on 21 February, so its predictions do not take into account the potential effects of the war. The group is on course to rapidly expand its electrified product offering in the coming years. Audi itself will launch its final combustion-engined car in 2026, while Lamborghini has committed to hybridising its line-up in 2024 and launching its first pure-EV in the second half of the decade. The company's CEO, Markus Duesmann, said: "“This year, we’ll focus more strongly on the topics of sustainability, electrification and digitalisation, and we’ll start the next stage of our transformational course to 2030, which entails the phasing out of combustion technology, a comprehensive roadmap for electromobility and the establishment of new digital business models and services in collaboration with Cariad, the software unit owned by the VW Group."