Audi’s margins take a hit as it tries to overtake rival BMW

 
Adam Hignett
Trying to rival BMW for first place on the autobahn has taken the shine off Audi’s margins
German car maker Audi yesterday said that the brakes had been put on its margins in 2014 as competition at the top end of the market stepped up a gear.

The company has accelerated investment in recent years as it seeks to overtake BMW as the world’s largest manufacturer of high-end cars.

But the investment drive has hit margins, which slipped to 9.6 per cent last year from 10.1 per cent in 2013.

The squeeze has been exacerbated as the company coupled the extra spending with high discounts in a bid to gain a bigger market share.

The company is planning to expand its upmarket range to 60 different models in the coming years, from 52 now, and is investing €1bn (£710m) on new factories in Mexico and Brazil.

The Audi group saw revenues increase by eight per cent during 2014, to €53bn, while profit before tax increased by 12.5 per cent to €6bn.

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