2003 Annual Report
Vorsprung durch Technik www.audi.com
2004 Financial Calendar
Annual Press Conference February 25, 2004 Customer Centre at Audi Forum Ingolstadt Annual General Meeting May 12, 2004 Customer Centre at Audi Forum Ingolstadt Interim Report August 3, 2004
Audi Group Key Figures
Production
Vehicle sales
Dec. 31, 2003
Dec. 31, 2002
Change in %
Cars
761,582
735,913
3.5
Engines
1,342,883
1,284,488
4.5
Cars
1,003,791
995,531
0.8
769,893
742,128
3.7
Audi Germany
237,786
243,650
– 2.4
Outside Germany
532,107
498,478
6.7
Lamborghini
1,305
424
207.8
232,593
252,979
– 8.1
Average
52,689
51,198
2.9
Revenue
EUR million
23,406
22,603
3.6
Profit before tax
EUR million
1,108
1,254
– 11.6
Net profit
EUR million
816
774
5.4
Percent
4.7
5.6
EUR million
2,094
2,410
– 13.1
636
834
– 23.7
EUR million
1,871
1,641
14.0
operating activities
EUR million
2,9251
2,503
16.9
Balance sheet total
EUR million
14,213
12,787
11.2
Percent
39.8
38.6
Other Volkswagen Group brands
This booklet provides an overview of the Audi model range. If this pocket is empty, please contact the Finance Analysis and Publications Department:
Road Book of Emotions
Phone +49 (0)8 4189-4 03 00
Employees
Rate of return before tax Capital investments
AUDI AG Finance Analysis and Publications I/FF-12 85045 Ingolstadt Germany Phone +49 (0)8 41 89-4 03 00 Fax +49 (0)8 41 89-3 09 00
2003 Annual Report
Capitalised development costs Depreciation Cash flow from
Equity ratio 1
New method of reporting cash flow from operating activities from 2003; the figure for 2002 has been adjusted
2003 Annual Report
Vorsprung durch Technik www.audi.com
2004 Financial Calendar
Annual Press Conference February 25, 2004 Customer Centre at Audi Forum Ingolstadt Annual General Meeting May 12, 2004 Customer Centre at Audi Forum Ingolstadt Interim Report August 3, 2004
Audi Group Key Figures
Production
Vehicle sales
Dec. 31, 2003
Dec. 31, 2002
Change in %
Cars
761,582
735,913
3.5
Engines
1,342,883
1,284,488
4.5
Cars
1,003,791
995,531
0.8
769,893
742,128
3.7
Audi Germany
237,786
243,650
– 2.4
Outside Germany
532,107
498,478
6.7
Lamborghini
1,305
424
207.8
232,593
252,979
– 8.1
Average
52,689
51,198
2.9
Revenue
EUR million
23,406
22,603
3.6
Profit before tax
EUR million
1,108
1,254
– 11.6
Net profit
EUR million
816
774
5.4
Percent
4.7
5.6
EUR million
2,094
2,410
– 13.1
636
834
– 23.7
EUR million
1,871
1,641
14.0
operating activities
EUR million
2,9251
2,503
16.9
Balance sheet total
EUR million
14,213
12,787
11.2
Percent
39.8
38.6
Other Volkswagen Group brands
This booklet provides an overview of the Audi model range. If this pocket is empty, please contact the Finance Analysis and Publications Department:
Road Book of Emotions
Phone +49 (0)8 4189-4 03 00
Employees
Rate of return before tax Capital investments
AUDI AG Finance Analysis and Publications I/FF-12 85045 Ingolstadt Germany Phone +49 (0)8 41 89-4 03 00 Fax +49 (0)8 41 89-3 09 00
2003 Annual Report
Capitalised development costs Depreciation Cash flow from
Equity ratio 1
New method of reporting cash flow from operating activities from 2003; the figure for 2002 has been adjusted
Review of 2003
January to March
10-Year Overview 1
April to June
German Commercial Code 1995
1996
1997
1998
1999
2000
2001
2002
2003
Cars
352,589
446,808
491,501
557,777
619,030
626,059
650,850
727,033
735,913
761,582
Engines
544,538
607,175
620,603
763,928
1,241,351
1,266,896
1,187,666
1,225,448
1,284,488
1,342,883
Vehicle sales
Cars
376,180
447,855
492,046
546,436
599,509
634,973
919,621
991,444
995,531
1,003,791
Audi
Cars
376,180
447,855
492,046
546,436
599,509
634,708
653,404
726,134
742,128
769,893
Cars
160,803
204,138
217,858
238,735
244,127
257,686
239,644
254,866
243,650
237,786
Outside Germany
Cars
215,377
243,717
274,188
307,701
355,382
377,287
413,760
471,268
498,478
532,107
Outside Germany
Percent
57.3
54.4
55.7
56.3
59.3
59.4
63.3
64.9
67.2
69.1
Market share, Germany
Percent
5.2
6.2
6.1
6.8
6.5
6.8
6.9
7.5
7.4
7.4
Lamborghini
Cars
–
–
–
–
–
265
296
297
424
1,305
Other Volkswagen Group brands
Cars
–
–
–
–
–
–
265,921
265,013
252,979
232,593
Production 2 Audi Pikes Peak quattro – debut in Detroit The Pikes Peak quattro provides a glimpse of the shape of things to come at Audi when it appears at the Detroit Auto Show in January. The response to this crossover model is so positive that the decision is taken at the end of 2003 to build it as a production model. Audi tops reader polls The Audi TT is voted “Coupé of the Year” for the fifth time by readers of the renowned British publication “What Car”. The new Audi A4 1.9 TDI is acknowledged as the “Best Compact Executive Saloon”. The readers of “auto motor und sport” vote the Audi A4 and the Audi A8 the “Best Cars in their Class” and the Audi allroad quattro as the “Best Crossover of 2003”.
World Ski Championships 2003 presented by Audi Audi accompanies skiing enthusiasts worldwide through the winter. In addition to sponsoring the Alpine Ski World Cup, Audi is involved in the Alpine World Ski Championships in St. Moritz. Flood victims aided by Audi The victims of the catastrophic floods in summer 2002 receive financial assistance from Audi. AUDI AG employees had donated generously, with the company matching every euro contributed by the workforce. In March 2003, it is consequently possible to hand over half a million euros to a total of 32 charities and municipal bodies.
Geneva: presentation of the new A3 The new Audi A3 makes its debut at the Geneva Motor Show. The new compact Audi has everything it needs to repeat the unique success story of the previous A3 model. The presentation of the “small” Lamborghini Gallardo and the unveiling of the Audi Nuvolari quattro study, a 441 kW (600 bhp) high-performance Gran Turismo also causes a stir. Audi reports record figures Chairman of the Board of Management Dr. Martin Winterkorn announces the annual financial statements for 2002 to around 200 journalists at the Annual Press Conference at the Audi Forum Ingolstadt. The Audi Group once again reports record figures for revenue and vehicle sales.
July to September
10 years of Audi Hungaria AUDI HUNGARIA MOTOR Kft. celebrates its tenth anniversary. The company is the central engine supplier of the Audi Group and has been Hungary’s largest exporter for many years. The Hungarian Prime Minister Péter Medgyessy pays tribute to the achievements of Audi’s Hungarian subsidiary at the official celebrations. 10 years of Audi Toolmaking The Toolmaking Division of AUDI AG also celebrates ten years of operations. It is regarded as a pioneer of innovative techniques within the car industry, including aluminium forming technology, and patents have been filed for a great many of its own developments.
100,000th A6 from Changchun Audi reaches a further landmark in China with the production of the 100,000th Audi A6 at the Changchun plant. The long-wheelbase version of the Audi A6, built specifically for the Chinese market, has been in production locally since 1999 and was the first luxury saloon to be built in China. Starter’s orders for the A4 in Changchun Audi further extends its production range in China. A second car line, the Audi A4, goes into local production in China, with Audi once again assuming a pioneering role: the A4 is the first midsize luxury vehicle to be built in China, and is aimed at the growing group of young lifestyle-oriented customers.
Bayern Munich, powered by Audi Bayern Munich receives an end-of-season boost from its automotive sponsor, Audi. The players of the new German champions collect their new Audi cars in Ingolstadt. Bayern Munich are now “powered by Audi” in a very real sense. The Bayern players’ new fleet of cars musters a total of almost 8,000 bhp. Triple victory in the category “Four Wheel Drive of the Year 2003” The new Audi A8 is voted “Best Four Wheel Drive of the Year 2003” by the readers of the motoring magazine “AUTO BILD alles allrad”. In second place is the Audi A6 quattro, with the Audi TT quattro following in third spot. There are a further 31 contenders in the full list.
250,000th aluminium body The 250,000th Audi with aluminium body leaves the production line at Neckarsulm – an A8 4.0 TDI quattro. Audi has been using aluminium in volume production for around ten years now, and has thus set new standards as a pioneer of lightweight design: the A2 and A8 models with their all-aluminium body have collected around 40 awards from internationally renowned institutions and media. Design awards Audi models win three out of twelve categories in the face of competition from 326 candidates from both Germany and other countries in the reader poll “Autonis 2003” staged by the periodical “AUTO Straßenverkehr”. This emphatic decision by nearly 50,000 well-informed readers serves to underline the charisma of Audi’s design philosophy.
October to December
Audi becomes automotive sponsor of Real Madrid Audi and Real Madrid sign an agreement making Audi the exclusive automotive sponsor of the Spanish champions: an ideal partnership between the most famous football club in the world and the leading premium car brand in Spain. Audi and Real Madrid are both able to look back on a history of success stretching back around one century. 40 years under the sign of the bull Uncompromising sportiness, refined aggression and Italian hot-bloodedness – these are the attributes that characterise the exclusive Lamborghini brand. To mark the company’s anniversary, Audi traces the unique history of this super sports car manufacturer in a special exhibition.
Audi A8 keeps IMF moving Audi provides a fleet of 250 Audi A8 cars for the meeting of the World Bank and the International Monetary Fund in Dubai. These saloons are a secure and comfortable means of transport for the top representatives of both organisations and 184 issuing banks. This is the largest fleet of A8 saloons ever to have been in action at an international event. Audi at the 2003 Frankfurt Motor Show Audi’s stand at the 2003 Frankfurt Motor Show features some exciting new exhibits. The real star is the Audi Le Mans quattro, sharing the same genes as the triple Le Mans winner, the Audi R8. The spotlight is also on the Audi S4 Cabriolet and the new A8 3.0 TDI with piezo injection system.
INI.TUM gets the go-ahead INI.TUM denotes the Ingolstadt-based institutes of the Technical University of Munich. The new centre for application-based research in the field of vehicle and information technology is launched by AUDI AG, the Technical University of Munich and the city of Ingolstadt. All participating parties stand to benefit from the project: from the university’s point of view, it represents an important component of its regionalisation policy. From Audi’s point of view, the PhD students perform valuable research work and ensure that Audi will continue to live up to its claim of “Vorsprung durch Technik” in the future. One-millionth A3 built A further landmark is reached in the success story of the Audi A3: the onemillionth specimen of this successful car line leaves the production line; the new A3 already accounts for 120,000 of the total.
DSV athletes teaming up with Audi It is announced that top skiers, coaches and officials of the German Ski Federation are to be provided with vehicles for the 2003/2004 winter season. World Champion and overall World Cup winner Ronny Ackermann is thrilled: “However deep the snow is, I know that quattro drive will get me safely to my destination.” The same applies to trips to the Audi wind tunnel, where athletes strive to find the aerodynamically optimum position and test new materials with the aid of Audi’s technicians. Concept Design Munich opened The revamped Audi design studio is opened in Munich’s Schwabing quarter. Designers, engineers and trend specialists develop futuristic visions for the Audi brand group here. Concept Design Munich in particular sees its role as providing intellectual guidance and pushing back the frontiers of creativity.
More triumphs for the Audi R8 Audi wins the American Le Mans Series for the fourth time in succession. The Audi customer teams Infineon Joest and ADT Champion Racing add to the Audi R8’s string of victories in the 2003 season. Frank Biela and Marco Werner (Infineon Team Joest) win the drivers’ standings ahead of JJ Lehto and Johnny Herbert (Team ADT Champion Racing).
Germany
Employees
Average
32,215
32,823
34,529
37,761
41,011
45,800
49,396
51,141
51,198
52,689
Revenue
EUR million
6,880
8,527
9,616
11,458
13,918
15,146
19,952
22,032
22,603
23,406
Cost of materials
EUR million
4,457
5,620
6,365
7,568
9,578
10,155
14,539
15,860
16,726
17,163
Personnel costs
EUR million
1,342
1,553
1,663
1,973
2,111
2,291
2,542
2,660
2,739
2,938
EUR
41,660
47,311
48,173
52,251
51,485
50,022
51,456
52,018
53,496
55,763
Depreciation
EUR million
467
529
455
556
885
945
1,199
1,435
1,641
1,871
Profit before tax
EUR million
96
301
441
569
861
839
986
1,322
1,254
1,108
Net profit
EUR million
11
57
154
188
237
324
734
769
774
816
Share price (year-end price) 3
EUR
24.03
24.29
48.06
70.81
75.16
61.20
59.59
160.00
191.00
225.00
Compensatory payment
EUR
0.15
0.31
0.46
0.61
0.77
0.77
1.20
1.30
1.30
Added value
EUR million
1,464
1,882
2,157
2,606
3,039
3,198
3,600
3,914
4,023
4,292
Capital investments
EUR million
769
442
739
1,006
1,620
1,516
2,422
2,151
2,410
2,094
Cash flow 5
EUR million
624
907
765
1,020
1,213
1,163
2,094
2,452
2,503
2,9256
Fixed assets
EUR million
1,835
1,714
1,978
2,412
3,126
3,679
6,988
7,624
8,238
8,471
Current assets
EUR million
1,787
2,562
2,914
3,182
3,359
3,024
3,379
3,631
4,548
5,742
Equity
EUR million
910
926
1,014
1,109
1,231
1,441
3,817
4,342
4,940
5,658
Liabilities
EUR million
2,712
3,349
3,878
4,485
5,254
5,262
6,551
6,913
7,847
8,555
Balance sheet total
EUR million
3,622
4,275
4,892
5,594
6,485
6,703
10,368
11,256
12,787
14,213
Personnel costs per employee
1
2
Awards for the Audi A8 Readers of the motoring magazine “Auto Zeitung” award the Audi A8 the “Auto Trophy 2003” in the category “Luxury Class Overall”. The international trade world is likewise outspoken in its praise of the A8: “The Audi A8 is clearly the best in its class and a technological standard-bearer that will have an enduring impact on alternative lightweight concepts,” emphasises Fritz Ebert, President of the Automotive Circle International, at the presentation of the “EuroCarBody Award 2003”, the most celebrated European innovation prize for body manufacturing.
IAS
1994
3
4 5 6
Figures for 2001 calculated for the first time according to the International Accounting Standards (IAS); figures for the 2000 financial year reconciled with IAS for purposes of comparison Excluding 2,021 (1994) and 875 (1995) Avant RS2 Figures for 1994 –1998 adjusted at ratio of 1:10 following introduction of individual share certificates; year-end price on Munich Stock Exchange In accordance with the resolution to be passed by the Annual General Meeting of Volkswagen AG on April 22, 2004 In IAS: cash flow from operating activities New method of reporting cash flow from operating activities from 2003; the figure for 2002 has been adjusted
|
102 103
X4
Review of 2003
January to March
10-Year Overview 1
April to June
German Commercial Code 1995
1996
1997
1998
1999
2000
2001
2002
2003
Cars
352,589
446,808
491,501
557,777
619,030
626,059
650,850
727,033
735,913
761,582
Engines
544,538
607,175
620,603
763,928
1,241,351
1,266,896
1,187,666
1,225,448
1,284,488
1,342,883
Vehicle sales
Cars
376,180
447,855
492,046
546,436
599,509
634,973
919,621
991,444
995,531
1,003,791
Audi
Cars
376,180
447,855
492,046
546,436
599,509
634,708
653,404
726,134
742,128
769,893
Cars
160,803
204,138
217,858
238,735
244,127
257,686
239,644
254,866
243,650
237,786
Outside Germany
Cars
215,377
243,717
274,188
307,701
355,382
377,287
413,760
471,268
498,478
532,107
Outside Germany
Percent
57.3
54.4
55.7
56.3
59.3
59.4
63.3
64.9
67.2
69.1
Market share, Germany
Percent
5.2
6.2
6.1
6.8
6.5
6.8
6.9
7.5
7.4
7.4
Lamborghini
Cars
–
–
–
–
–
265
296
297
424
1,305
Other Volkswagen Group brands
Cars
–
–
–
–
–
–
265,921
265,013
252,979
232,593
Production 2 Audi Pikes Peak quattro – debut in Detroit The Pikes Peak quattro provides a glimpse of the shape of things to come at Audi when it appears at the Detroit Auto Show in January. The response to this crossover model is so positive that the decision is taken at the end of 2003 to build it as a production model. Audi tops reader polls The Audi TT is voted “Coupé of the Year” for the fifth time by readers of the renowned British publication “What Car”. The new Audi A4 1.9 TDI is acknowledged as the “Best Compact Executive Saloon”. The readers of “auto motor und sport” vote the Audi A4 and the Audi A8 the “Best Cars in their Class” and the Audi allroad quattro as the “Best Crossover of 2003”.
World Ski Championships 2003 presented by Audi Audi accompanies skiing enthusiasts worldwide through the winter. In addition to sponsoring the Alpine Ski World Cup, Audi is involved in the Alpine World Ski Championships in St. Moritz. Flood victims aided by Audi The victims of the catastrophic floods in summer 2002 receive financial assistance from Audi. AUDI AG employees had donated generously, with the company matching every euro contributed by the workforce. In March 2003, it is consequently possible to hand over half a million euros to a total of 32 charities and municipal bodies.
Geneva: presentation of the new A3 The new Audi A3 makes its debut at the Geneva Motor Show. The new compact Audi has everything it needs to repeat the unique success story of the previous A3 model. The presentation of the “small” Lamborghini Gallardo and the unveiling of the Audi Nuvolari quattro study, a 441 kW (600 bhp) high-performance Gran Turismo also causes a stir. Audi reports record figures Chairman of the Board of Management Dr. Martin Winterkorn announces the annual financial statements for 2002 to around 200 journalists at the Annual Press Conference at the Audi Forum Ingolstadt. The Audi Group once again reports record figures for revenue and vehicle sales.
July to September
10 years of Audi Hungaria AUDI HUNGARIA MOTOR Kft. celebrates its tenth anniversary. The company is the central engine supplier of the Audi Group and has been Hungary’s largest exporter for many years. The Hungarian Prime Minister Péter Medgyessy pays tribute to the achievements of Audi’s Hungarian subsidiary at the official celebrations. 10 years of Audi Toolmaking The Toolmaking Division of AUDI AG also celebrates ten years of operations. It is regarded as a pioneer of innovative techniques within the car industry, including aluminium forming technology, and patents have been filed for a great many of its own developments.
100,000th A6 from Changchun Audi reaches a further landmark in China with the production of the 100,000th Audi A6 at the Changchun plant. The long-wheelbase version of the Audi A6, built specifically for the Chinese market, has been in production locally since 1999 and was the first luxury saloon to be built in China. Starter’s orders for the A4 in Changchun Audi further extends its production range in China. A second car line, the Audi A4, goes into local production in China, with Audi once again assuming a pioneering role: the A4 is the first midsize luxury vehicle to be built in China, and is aimed at the growing group of young lifestyle-oriented customers.
Bayern Munich, powered by Audi Bayern Munich receives an end-of-season boost from its automotive sponsor, Audi. The players of the new German champions collect their new Audi cars in Ingolstadt. Bayern Munich are now “powered by Audi” in a very real sense. The Bayern players’ new fleet of cars musters a total of almost 8,000 bhp. Triple victory in the category “Four Wheel Drive of the Year 2003” The new Audi A8 is voted “Best Four Wheel Drive of the Year 2003” by the readers of the motoring magazine “AUTO BILD alles allrad”. In second place is the Audi A6 quattro, with the Audi TT quattro following in third spot. There are a further 31 contenders in the full list.
250,000th aluminium body The 250,000th Audi with aluminium body leaves the production line at Neckarsulm – an A8 4.0 TDI quattro. Audi has been using aluminium in volume production for around ten years now, and has thus set new standards as a pioneer of lightweight design: the A2 and A8 models with their all-aluminium body have collected around 40 awards from internationally renowned institutions and media. Design awards Audi models win three out of twelve categories in the face of competition from 326 candidates from both Germany and other countries in the reader poll “Autonis 2003” staged by the periodical “AUTO Straßenverkehr”. This emphatic decision by nearly 50,000 well-informed readers serves to underline the charisma of Audi’s design philosophy.
October to December
Audi becomes automotive sponsor of Real Madrid Audi and Real Madrid sign an agreement making Audi the exclusive automotive sponsor of the Spanish champions: an ideal partnership between the most famous football club in the world and the leading premium car brand in Spain. Audi and Real Madrid are both able to look back on a history of success stretching back around one century. 40 years under the sign of the bull Uncompromising sportiness, refined aggression and Italian hot-bloodedness – these are the attributes that characterise the exclusive Lamborghini brand. To mark the company’s anniversary, Audi traces the unique history of this super sports car manufacturer in a special exhibition.
Audi A8 keeps IMF moving Audi provides a fleet of 250 Audi A8 cars for the meeting of the World Bank and the International Monetary Fund in Dubai. These saloons are a secure and comfortable means of transport for the top representatives of both organisations and 184 issuing banks. This is the largest fleet of A8 saloons ever to have been in action at an international event. Audi at the 2003 Frankfurt Motor Show Audi’s stand at the 2003 Frankfurt Motor Show features some exciting new exhibits. The real star is the Audi Le Mans quattro, sharing the same genes as the triple Le Mans winner, the Audi R8. The spotlight is also on the Audi S4 Cabriolet and the new A8 3.0 TDI with piezo injection system.
INI.TUM gets the go-ahead INI.TUM denotes the Ingolstadt-based institutes of the Technical University of Munich. The new centre for application-based research in the field of vehicle and information technology is launched by AUDI AG, the Technical University of Munich and the city of Ingolstadt. All participating parties stand to benefit from the project: from the university’s point of view, it represents an important component of its regionalisation policy. From Audi’s point of view, the PhD students perform valuable research work and ensure that Audi will continue to live up to its claim of “Vorsprung durch Technik” in the future. One-millionth A3 built A further landmark is reached in the success story of the Audi A3: the onemillionth specimen of this successful car line leaves the production line; the new A3 already accounts for 120,000 of the total.
DSV athletes teaming up with Audi It is announced that top skiers, coaches and officials of the German Ski Federation are to be provided with vehicles for the 2003/2004 winter season. World Champion and overall World Cup winner Ronny Ackermann is thrilled: “However deep the snow is, I know that quattro drive will get me safely to my destination.” The same applies to trips to the Audi wind tunnel, where athletes strive to find the aerodynamically optimum position and test new materials with the aid of Audi’s technicians. Concept Design Munich opened The revamped Audi design studio is opened in Munich’s Schwabing quarter. Designers, engineers and trend specialists develop futuristic visions for the Audi brand group here. Concept Design Munich in particular sees its role as providing intellectual guidance and pushing back the frontiers of creativity.
More triumphs for the Audi R8 Audi wins the American Le Mans Series for the fourth time in succession. The Audi customer teams Infineon Joest and ADT Champion Racing add to the Audi R8’s string of victories in the 2003 season. Frank Biela and Marco Werner (Infineon Team Joest) win the drivers’ standings ahead of JJ Lehto and Johnny Herbert (Team ADT Champion Racing).
Germany
Employees
Average
32,215
32,823
34,529
37,761
41,011
45,800
49,396
51,141
51,198
52,689
Revenue
EUR million
6,880
8,527
9,616
11,458
13,918
15,146
19,952
22,032
22,603
23,406
Cost of materials
EUR million
4,457
5,620
6,365
7,568
9,578
10,155
14,539
15,860
16,726
17,163
Personnel costs
EUR million
1,342
1,553
1,663
1,973
2,111
2,291
2,542
2,660
2,739
2,938
EUR
41,660
47,311
48,173
52,251
51,485
50,022
51,456
52,018
53,496
55,763
Depreciation
EUR million
467
529
455
556
885
945
1,199
1,435
1,641
1,871
Profit before tax
EUR million
96
301
441
569
861
839
986
1,322
1,254
1,108
Net profit
EUR million
11
57
154
188
237
324
734
769
774
816
Share price (year-end price) 3
EUR
24.03
24.29
48.06
70.81
75.16
61.20
59.59
160.00
191.00
225.00
Compensatory payment
EUR
0.15
0.31
0.46
0.61
0.77
0.77
1.20
1.30
1.30
Added value
EUR million
1,464
1,882
2,157
2,606
3,039
3,198
3,600
3,914
4,023
4,292
Capital investments
EUR million
769
442
739
1,006
1,620
1,516
2,422
2,151
2,410
2,094
Cash flow 5
EUR million
624
907
765
1,020
1,213
1,163
2,094
2,452
2,503
2,9256
Fixed assets
EUR million
1,835
1,714
1,978
2,412
3,126
3,679
6,988
7,624
8,238
8,471
Current assets
EUR million
1,787
2,562
2,914
3,182
3,359
3,024
3,379
3,631
4,548
5,742
Equity
EUR million
910
926
1,014
1,109
1,231
1,441
3,817
4,342
4,940
5,658
Liabilities
EUR million
2,712
3,349
3,878
4,485
5,254
5,262
6,551
6,913
7,847
8,555
Balance sheet total
EUR million
3,622
4,275
4,892
5,594
6,485
6,703
10,368
11,256
12,787
14,213
Personnel costs per employee
1
2
Awards for the Audi A8 Readers of the motoring magazine “Auto Zeitung” award the Audi A8 the “Auto Trophy 2003” in the category “Luxury Class Overall”. The international trade world is likewise outspoken in its praise of the A8: “The Audi A8 is clearly the best in its class and a technological standard-bearer that will have an enduring impact on alternative lightweight concepts,” emphasises Fritz Ebert, President of the Automotive Circle International, at the presentation of the “EuroCarBody Award 2003”, the most celebrated European innovation prize for body manufacturing.
IAS
1994
3
4 5 6
Figures for 2001 calculated for the first time according to the International Accounting Standards (IAS); figures for the 2000 financial year reconciled with IAS for purposes of comparison Excluding 2,021 (1994) and 875 (1995) Avant RS2 Figures for 1994 –1998 adjusted at ratio of 1:10 following introduction of individual share certificates; year-end price on Munich Stock Exchange In accordance with the resolution to be passed by the Annual General Meeting of Volkswagen AG on April 22, 2004 In IAS: cash flow from operating activities New method of reporting cash flow from operating activities from 2003; the figure for 2002 has been adjusted
|
102 103
X4
Audi is one of the world’s leading automotive premium brands, and builds high-quality, technologically progressive cars that are among the most admired on the international market. An advanced, forward-looking approach to corporate management and development constitute the basis of our success. We place our customers’ wishes at the very heart of our unceasing quest to find ever better solutions. This philosophy ist reflected in our brand claim “Vorsprung durch Technik”. Our cars serve as a gateway to a fascinating realm of experience. They elicit an emotional response and give every journey an unmistakable character. Kilometre after kilometre. The roadbooks in this Annual Report highlight what it means to be travelling in an Audi. Their purpose is simply to convey a concise initial impression. Because it is only possible to appreciate every facet of these cars by driving them yourself.
An overview of the Audi model range is provided in the booklet at the end of the Annual Report.
Contents Foreword
2
Report of the Supervisory Board
4
Product Strategy
6
Audi Brand Group
8
The New Audi A6
14
Technology
18
The New V8 TDI Engine
20
Ultramodern LED Lighting Technology in Series Production
22
Environment and Society
24
Responsibility for the Environment
26
Corporate Citizenship
28
Employees
30
Entrepreneurial Ideas and Actions
32
Prospects for Young People
34
Market and Customer
36
Market News
38
China’s Love Affair with Audi
40
Group Companies
44
Corporate Governance
48
Audi Shares
49
Management Report of the Audi Group
50
Consolidated Financial Statements
61
Glossary
100
10-Year Overview
103
|1
Members of the Board of Management
Dr. rer. pol. Horst Neumann, Human Resources
Dr. h.c. Andreas Schleef, Chairman of the Board of Management of SEAT S.A.
Dipl.-Ing. Erich Schmitt, Purchasing
Dr. rer. nat. Martin Winterkorn, Chairman of the Board of Management, Technical Development
Dipl.-Betriebswirt (FH) Rupert Stadler, Finance and Organisation
Dr. rer. pol. Jochem Heizmann, Production
Dipl.-Kaufmann Ralph Weyler, Marketing and Sales
Foreword
The success of landmark strategic decisions often takes some time to transpire: 2003 was a year in which such evidence came to light. The almost flawless changeover to the new-generation Audi A3 illustrated just how practicable the idea of extending the premium range into the compact class genuinely is. Whereas the first A3 in 1996 still constituted a bold venture into a previously nonexistent vehicle segment, the new A3 systematically improves on this best-seller. All this, let it be said, at a time when Germany in particular – our biggest market – has been battered by the adverse economic climate. The same is true of the second generation of the Audi A8, which recorded its first full year in production in 2003. This arguably most sporty of luxury saloons has already easily surpassed the success of its predecessor in Europe and especially the United States. The Audi brand demonstrated immense confidence in unveiling three trailblazing concept studies last year, all of which met with an unprecedentedly positive reception: the Pikes Peak quattro, the Nuvolari quattro and the Le Mans quattro. These studies highlight the direction that our brand is taking in repositioning itself with a greater emphasis on sportiness. The accent will likewise be on “sportiness”, “progressiveness”, “sophistication” and “emotion” in the new production models that will be launched in 2004. We aim to set a new benchmark in the intensely competitive segment of business saloons with our new Audi A6. On the strength of its dynamism, design, innovations and compelling overall concept, the A6 will be a crucial factor in Audi’s success. It will redefine the face of our brand. We will be extending the Audi range in the premium compact class with a new five-door product variant that will signal our entry into this attractive class in the USA. Audi employees at its locations in Neckarsulm, Ingolstadt and Györ performed admirably in what was a difficult 2003. New record-breaking figures for production and unit sales demonstrate both their motivation and the fact that we were able to improve our overall cost situation quite considerably. The very respectable profit before tax, which had to absorb considerable exchange rate movements and the costs of production start-ups, moreover underscores the entrepreneurial efficiency of AUDI AG. On behalf of the entire Board of Management I would like to thank all our customers and also those who have contributed towards Audi’s continuing success through their individual efforts. Ingolstadt, February 2004
Dr. rer. nat. Martin Winterkorn
|
2 3
Report of the Supervisory Board
Dr.-Ing. e.h. Bernd Pischetsrieder, Chairman of the Supervisory Board
The 2003 financial year saw Audi improve on its
No meeting of the Negotiating Committee has
revenue, production and vehicle sales for the
been required to date.
tenth year in succession. These gains are not fully
Throughout the past year, the Supervisory
reflected in the earnings figure. A continuing high
Board considered the development of sales
level of capital investment in the technical devel-
markets, and the situation and business progress
opment of new products, additional burdens
of the company and in particular its major sub-
resulting from the generally weak state of the
sidiaries at quarterly meetings, on the basis of
market and the adverse shift in the exchange rate
detailed reports. Following detailed consulta-
all prompted a downturn in earnings. Through
tions, the financial, personnel and investment
the high level of capital investment, the Board of
plans were approved at the meeting held on
Management and Supervisory Board nevertheless
December 9, 2003.
laid the foundations for further successes in the
The Supervisory Board moreover regularly
next few years. The fact that AUDI AG was once
monitored the company’s development outside
again able to post record vehicle sales despite
the context of its meetings and actively sup-
the difficult economic situation is a fitting tribute
ported the company management in its work.
to the combined efforts of the management, the
Each meeting of the Supervisory Board was
workforce and the employees’ elected represen-
preceded by detailed consultations between the
tatives. The Supervisory Board takes this opportu-
members of the presiding committee.
nity to thank and acknowledge all concerned. All seats on the Supervisory Board were up for
PwC Deutsche Revision Aktiengesellschaft Wirtschaftsprüfungsgesellschaft was commis-
re-election during the past year. The ten employ-
sioned with the task of auditing the Consolidated
ees’ representatives were elected on April 29,
Financial Statements of the Audi Group and the
2003. The election of the shareholders’ representa-
Annual Financial Statements of AUDI AG, as
tives was held at the Annual General Meeting on
well as the management reports; these received
May 14, 2003. The term of office of all Supervisory
the unqualified certification of the auditors. The
Board members ends with the close of the Annual
examination conducted by the Audit Committee
General Meeting which is to grant discharge for
and Supervisory Board likewise revealed no
the 2007 financial year. At its constituent meeting
cause for objections. At its meeting on February
on May 14, 2003 the Supervisory Board re-elected
20, 2004, the Supervisory Board was consequently
Dr. Bernd Pischetsrieder as its Chairman and
able to ratify both sets of accounts. The Annual
Xaver Meier as Deputy Chairman. The Negotiating
Financial Statements of AUDI AG are thus estab-
Committee pursuant to Section 27 Para. 3 of
lished.
German Codetermination Law and the Audit Com-
The principal topics of consultations held in
mittee pursuant to Section 5.3.2 of the German
the past year were the measures to enhance
Corporate Governance Code were also elected.
production flexibility, Audi’s activities in China
and Hungary, and exchange rate movements and
There was the following change to the
their impact on the company’s financial perfor-
composition of the Supervisory Board before the
mance. The Supervisory Board also discussed the
constituent meeting on May 14, 2003:
ongoing development of the German Corporate
Prof. Dr. Robert Büchelhofer surrendered office
Government Code in detail and passed the neces-
with effect from April 8, 2003 after seven years’
sary resolutions.
service, including around six years as chairman.
The Audit Committee met on three occasions
Upon the application of the Board of Manage-
in the past financial year and was informed in
ment, the Registration Court of Ingolstadt
depth on the Consolidated Financial Statements
appointed Hans Dieter Pötsch as supplementary
for 2002, risk management measures within
member with effect from April 25, 2003.
the company and the current situation at the end
The nascent economic recovery in the USA
of 2003. The auditors participated in the first
and Asia at the end of 2003 now appears to be
meeting and explained their key findings in the
spreading to other economic regions of the
2002 Consolidated Financial Statements.
world. In Germany, advance indicators seem to
There were the following changes to the Board of Management: Peter Abele retired on March 31, 2003. The
point towards an economic recovery that could also revive the car market. Production and sales of the new Audi A6 will commence in the spring
Supervisory Board is deeply grateful and indebted
of 2004. This model will account for a substantial
to Mr Abele for over 17 years of meritorious
portion of our sales volume and earnings, but it
service to Audi, including as Board Member for
is above all a standard-bearer of the brand image,
“Finance and Organisation” since June 1997.
and will bring us closer to realising our strategic
Rupert Stadler took over this position with effect
brand objective of “attracting new customers
from April 1, 2003.
through innovative, sporty vehicles”.
After six years of effective service, Dr. Werner
Hand in hand with the workforce and the man-
Mischke retired from the Board of Management
agement, the Supervisory Board will continue to
of AUDI AG with effect from April 30, 2003 and
contribute towards the company’s future success
assumed the posts of Chairman of the Advisory
by performing more than its statutory minimum
Board of quattro GmbH and Chairman of the
duties.
Board of Directors of Automobili Lamborghini S.p.A. with effect from January 1, 2003.
Ingolstadt, February 20, 2004
Ralph Weyler was appointed to succeed Dr. Georg Flandorfer as Board Member with responsibility for “Marketing and Sales” with effect from October 1, 2003. After over six successful years at Audi, Dr. Flandorfer is turning his attention to new tasks within Volkswagen AG. The
Dr.-Ing. e.h. Bernd Pischetsrieder
Supervisory Board would like to thank Dr. Mischke
Chairman of the Supervisory Board
and Dr. Flandorfer for their considerable efforts on behalf of the company, and wishes them much success in their new posts.
|
4 5
Product Strategy
Total distance: 30.2 km Journey time: 0:27 hours Vehicle: Audi A6
Distance in km
Destination
Description
0.0
Certainty
Congress centre
2.1
Invitations
Motorway
10.9
Temptations
Approach road
14.5
Fascination
Car park entrance
14.6
Exhilaration
Lower deck
14.8
Curiosity
Upper deck
15.4
Daydreams
Tunnel
18.5
Fantasies
Urban expressway
20.7
Exertion
Motorway
27.5
Privilege
Urban expressway
30.2
Passion
Link road
Tense expectation . . .
. . . tingling
certainty. Wherever they happen to meet, he knows it’s definitely worth it . . . km 0.0
|
6 7
. . . Attraction at very first sight. Tendency rising. Some
invitations have lingering appeal . . . km 2.1
Audi brand group With visible kick: car brands are brought to life by the products themselves. A car must demonstrate at first glance whether it is tame or wild, staid or extravagant, leisurely or sporty. The promise that it radiates when stationary must be redeemed when it is on the move. But above all, a car must do one thing: it must fascinate. On every journey, in any weather, year after year.
Audi, SEAT and Lamborghini
However different Audi, SEAT and Lamborghini may appear to be in their present form, they are
A team with three clear strengths
united by a strong bond comprising the strands
Audi is the lead brand of the sporty brand group.
sport, technology and design. The sports outlook
Through Audi, SEAT and Lamborghini have access
is also reflected by the mentality of the employ-
to many years of top technical knowledge and
ees: the urge “always to be better” is as much at
to sales and marketing know-how. Both brands
home in Ingolstadt and Neckarsulm as it is in
are able to tap into this resource of expertise that
Martorell and Sant’Agata.
is unparalleled within the sphere of automotive competitors. Audi has accomplished the unique
Every SEAT and every Lamborghini encapsulates
feat of becoming a recognised member of that
Audi’s wealth of expertise
elite circle of the world’s best car manufacturers
The roles are clearly defined within the brand
within just a few years.
group. Lamborghini is the top sports brand. The Italian-built super sports cars with the raging bull in their emblem are the stuff that dreams are made of. Audi, with its three central values sportiness, sophistication and progressiveness, represents the core of the brand family. The strategic direction of the group is determined in Ingolstadt. Its range of products extends from the premium compact class to the luxury class. SEAT interprets the notion of sportiness in its own highly charged way. SEAT is consequently able to address younger target groups and bring them closer to the Audi brand. The group’s communication strategy aims to mobilise the trickle-down effect from Audi to SEAT. Audi is
Three brands under joint leadership: Audi, SEAT and Lamborghini
Product Strategy
. . . What is attractiveness? A fragrance? A face? Some
temptations
just shouldn’t be resisted . . . km 10.9
This approach moreover ensures that the distinctive profiles of Audi, SEAT and Lamborghini are placed even more sharply in focus. Uncompromising, extreme, Italian 2003 was the year of the Gallardo at Lamborghini. For the first time in many years, the Italian brand now has two product lines to offer. What is more, the Gallardo gives the company access to a much broader group of customers than its ultra-exclusive “large” model, the Murciélago. After five years of ownership by Audi, Lamborghini can take pride in having rediscovered the primeval nature The first product of the Audi brand group: the SEAT ALTEA
of the brand, all the while enhancing its aura of sophistication. The response of customers and the media worldwide resoundingly confirms this.
moreover able to use specific skills and capacities
The Gallardo is a poised four-wheel-drive two-
at SEAT. The first visible evidence of the brand
seater with a 368 kW (500 bhp) engine: a thorough-
group’s work was the ALTEA prototype, which was
bred driving machine designed to awaken the
presented at the Frankfurt Motor Show.
true spirit of Lamborghini every day, whatever the weather – extreme acceleration, extreme corner-
Lofty ambitions for all brands
ing speeds. On top of all these qualities, it has an
All three brands share the same ambitious
aluminium space frame developed together with
standards of quality and reliability that Audi has
Audi specialists at Neckarsulm. As well as this
embodied for many years.
sporty lightweight structure, the high-tech cre-
Thanks to its composition, the Audi brand
dentials are exemplified by the V10 engine which
group is able to offer customers an extremely
Lamborghini engineers helped to develop, refine
broad portfolio of sporty vehicles – with a range
and give its special “bite”.
of prices and diversity that no competitor is able
The production start-up of the Gallardo was
to emulate. By rigorously upholding the character
a real challenge to the company, which grew
of the individual brands, it is possible to continue
to 762 employees by the end of 2003. After all,
enhancing the status of the cars by making
Lamborghini’s production volume more than
intelligent use of shared modules.
trebled between 2002 and 2003.
|
8 9
...
Fascination. Heart and mind in total harmony – the perfect blend. Perceptible magic . . . km 14.5
Customer analyses reveal that the Gallardo
Fit for the future
appeals in particular to drivers who have previ-
Audi is channelling considerable effort into build-
ously preferred other brands. Almost three-
ing on its strong market position in China. The
quarters of Gallardo customers are new addi-
brand has enjoyed the reputation as the pioneer
tions to Lamborghini’s exclusive list of customers.
of China’s burgeoning premium market since
The new R-GT celebrated its debut at the Frankfurt Motor Show. This is a version of the
1998. Its position as market leader is now to be consolidated by further extending the range
Murciélago modified for tough competition
available, flexibly increasing the local production
racing. Lamborghini will consequently once
capacity and building up a premium sales system.
again be cutting an impressive figure on race-
Many years of experience, the confidence of its
tracks worldwide.
Chinese counterparts and a knowledge of the specific demands of this emerging market constitute the basis of Audi’s success in the world’s most populous country. With around 2.3 million newly registered vehicles, the Chinese car market expanded by almost 70 percent compared with the previous year. Audi also placed the spotlight on cost management within the company in 2003. The recent exchange rate situation has heightened awareness of the cost items throughout the entire export-oriented car industry. In Audi’s case, about one third of new cars are sold outside the eurozone, with the tendency if anything rising. The challenge is therefore to enhance the efficiency of
A super sports car with aluminium body: the Lamborghini Gallardo
2003 also marked the 40th anniversary of the
the entire company in order to keep improving product substance and product quality. The year of the Audi A3
company. The limited-edition Murciélago will
Around seven years on, it can safely be said that
provide an exclusive group of customers with a
the “invention” of the Audi A3 was an accom-
lifelong reminder of how Ferruccio Lamborghini
plished feat of planning. And a bold one, at that:
yielded to his penchant for fast cars in 1963 and
when the first Audi A3 was unveiled in 1996,
set out to compete with the established manu-
many from within the car trade doubted whether
facturers.
there was any future in a “premium compact segment” of the market.
Product Strategy
. . . In his mind he’s already with her. The A6 quickens in response. Unbridled
exhilaration . . . km 14.6
dynamism into the A3 that was previously unknown in this segment. The sporty emphasis of the A3 is naturally also apparent in the smaller petrol and TDI engines. An S model open to the skies The Audi S4 met with a very positive response from customers and the media. The A4 Cabriolet clearly exceeded the company’s sales expectations in its very first full year in production. It was consequently only logical to create an S version of this open-top four-seater. Audi decided to unveil this model at the Frankfurt Motor Show. The second-generation Audi A3: even more sporty and dynamic
Market research indicated that the proportion of S models will be higher for the Cabriolet than for any other model in the Audi range. The
Today, with over one million A3 models having been built, any lingering doubts have long since
biggest market for this 253 kW (344 bhp) car will be North America.
evaporated. The second-generation A3 that Audi presented at the Geneva Motor Show in 2003 easily outstripped the sales performance of its predecessor in the first nine months after its launch. Around 120,000 of the new A3 were dispatched from the factory halls in 2003, within the space of just nine months. The palpably more dynamic presence of the new model, its outstanding handling and fascinating engines have not gone unnoticed by the public. The top-of-therange model is the version with a 3.2-litre, sixcylinder engine and the innovative Direct Shift Gearbox (DSG). 250 horsepower (184 kW), quattro drive and the gearbox that shifts without interrupting the power flow introduce a level of
The makings of a classic: the S4 Cabriolet
|
10 11
. . . combined with
curiosity.
On the journey back he wants to savour its sheer power anew . . . km 14.8
The power of eight cylinders
New lustre for the four rings
Audi deliberately kicked off the launch of the new
Amid the cut-and-thrust of the car market, the
A8 with the large eight-cylinder engine versions,
Audi brand has always been capable of producing
the 4.2 and 3.7-litre petrol engines. Customers
a few surprises. By skilfully blending sophistica-
were so captivated by these engines and the
tion with customer-centred innovations, it has
entire A8 concept that the A8 became the most
succeeded within the space of around a decade
successful eight-cylinder luxury saloon in Europe
in becoming a fully-fledged member of the elite
at a stroke.
club of the world’s best car manufacturers.
Audi launched the world’s most powerful
Comparable examples of such a rapid ascent are
passenger-car eight-cylinder diesel engine in the
extremely rare. Audi has moreover managed to
guise of the A8 4.0 TDI. In conjunction with
give its brand image a new, sporty finesse within
quattro drive and the lightweight design of the
little more than one year. The brand with the four
Audi Space Frame, this is a luxury saloon where
rings has been able to reposition itself in relation
you will need to look inside the engine compart-
to its competitors, thereby further enhancing
ment to discover that it is really a diesel. Its
its own appeal. Its consistently high sales figures
road performance belies this fact, though its low
at a time when markets remain flat are visible
fuel consumption and immense torque of 650
evidence of this.
Newton-metres do provide a strong hint.
A perception of the Audi brand as simultaneously ultra-dynamic and sophisticated is one of the strategic objectives of the company. “Sporty” applies not simply to the character of a particular vehicle, but refers rather to the reorientation and expansion of the entire product range. Notions such as sensuality and emotion play a key part. The standard-bearers of the company’s new direction in 2003 were the three concept studies Pikes Peak quattro, Nuvolari quattro and Le Mans quattro, which elicited a resoundingly positive response from visitors to the motor shows in Detroit, Geneva and Frankfurt. They point the way forward for Audi: powerful, dynamic, captivating and innovative. All three are interpretations of
The most sporty saloon in its class: the new Audi A8
Audi’s refined design principles, which emphasise in particular the sensuous styling and the modified radiator grille – the single frame.
Product Strategy
. . . Evening falls across the city. Cones of light illuminate the dusk. Time for
daydreams . . . km 15.4
Audi Pikes Peak quattro The star of Detroit 2003 bears a name that conjures up Audi’s illustrious tradition of motor sport: an Audi quattro won the renowned hillclimb up Pikes Peak in the Rocky Mountains three times in succession. That was back in the eighties. The Audi Pikes Peak quattro, vintage 2003, combines the virtues of a saloon, an Avant, a van and a sport utility vehicle. This imposing six-seater is powered by a 368 kW (500 bhp) biturbo eightcylinder engine – and, like all the study cars unveiled in 2003, it is ready for the road. Audi Nuvolari quattro
The new Audi face with the single-frame radiator grille
Together with the new Audi A3, the Nuvolari concept study was probably the most fascinating
Audi Le Mans quattro
attraction at the 2003 Geneva Motor Show: a
Over some 80 years of the Le Mans 24 Hours, only
spacious Gran Turismo combining elegance and
very few brands have succeeded in notching up
dynamism. A study car that has the makings of a
three wins in succession. Audi accomplished this
modern classic. A sports tourer that also reveals
hat trick in 2000, 2001 and 2002, then proceeded
a predisposition for the avant-garde. The Nuvolari
to unveil the Audi Le Mans quattro study at the
quattro’s V10 engine develops an enormous
Frankfurt Motor Show in 2003. The study car has
441 kW (600 bhp). The name of this study vehicle
everything that a purebred sports car needs: a
pays tribute to one of the most illustrious drivers
449 kW (610 bhp) mid engine, ideal weight distri-
of Auto Union’s racing cars in the nineteen-
bution, Audi Space Frame body and of course
thirties: Tazio Nuvolari, whom many historians of
quattro drive.
motor racing consider to be the best driver of his time.
While on the subject of quattro: Audi’s successful four-wheel-drive principle has unleashed a veritable torrent of imitation concepts by the car industry in recent years. For Audi, quattro always means high agility, outstanding roadholding and increased safety reserves. This is why all three Audi concept studies unveiled last year use quattro drive as their basis.
|
12 13
. . . and
fantasies without horizons. Another dynamic change of gear. A challenge like this . . . km 18.5
The new Audi A6
accentuated by bumpers painted in the body colour as standard and the dynamic appearance
Leading the way in design and performance
of the rear spoiler that provides extra road grip at
The new Audi A6 signals the advent of a vehicle
high speeds. All models are moreover equipped
that enhances the core characteristics of the full-
with a dual-branch exhaust system. Its mere
size class with traits borrowed from the luxury
outward appearance highlights the intention of
segment. In terms of design, performance and
the A6 to occupy top spot in its class.
sophistication, it redefines the benchmark in its class.
More spacious and safer The new A6 has grown overall. Larger vehicle
The A6 shows its strengths – even when
dimensions, a wider track and a longer wheelbase
standing
provide the occupants with further enhanced
The dynamic styling of the coupé-like shape of
ride comfort of the highest calibre. The luggage
the new Audi A6 is one of its most eye-catching
compartment on the new A6 is now for the first
features. The trapezoidal single-frame radiator
time equally voluminous on the front-wheel-drive
grille symbolises the forces that are unleashed
and quattro models. There is now more leg room
once the A6 sets off. The sporty impression is
and shoulder room inside. This not only improves the sense of space, but also enhances passive protection for the passengers. Active safety benefits from the latest generation of the electronic stabilisation program ESP, including brake assist, and electronic brake-force distribution EBD. The standard safety equipment in addition includes active head restraints at the front, fog lights and a light and rain sensor. The use of daytime driving lights in conjunction with xenon plus headlights is a world first for this vehicle category. As an option, this system can be extended by the “adaptive light” dynamic headlights which pivot the beams into a bend in accordance with the steering angle and road speed.
The new Audi A6 will appear on the roads from April
The new A6 incorporates extensive safety equipment, thus affording abundant protective potential for the driver and passengers alike.
Product Strategy
. . . merits a cool head. He really savours the
exertion. Makes the very most of it. Metre by metre . . . km 20.7
Outward evidence of inner values The interior design of the Audi A6 conveys clear sports appeal and ergonomic perfection in an utterly new light. The ergonomically arranged instrument panel integrates the driver perfectly into the cockpit. Only choice materials are used for the interior. There are fine leathers and inlays in wood or aluminium to choose from, providing every customer with ample scope for customising their vehicle. Sophistication extends to the standard specification of the new Audi A6, too. Its calibre is of a standard that can by no means be taken for granted even in the luxury class. For example, the
Design and performance – the new Audi A6 sets the standard
use of the electromechanical parking brake as featured on the A8 renders the handbrake lever superfluous. The centre console accommodates
Perfection in handling
the controls for the standard-fit Multi Media Inter-
The new Audi A6 sets the standard not just in
face “MMI basic”, which comes complete with
terms of design and equipment. The body, the
a 6.5-inch monochrome monitor, integrated radio
robust structure of which had already been
and CD player.
widely acknowledged on the previous version, has been further improved thanks to systemati-
Stylish differentiation
cally refined joining techniques and cutting-edge
Over and above the standard specification, the
lightweight design technology. The result is an
new Audi A6 is available with a wide range of
increase in torsional rigidity of over 35 percent,
optional elements. Unmistakable one-off configu-
which is particularly evident in the handling
rations can be created to reflect the individual
characteristics.
customer’s preferences. The possibilities range
The suspension of the new Audi A6 uses
from the extensive selection of paint finishes to
sports technology: the refined four-link front
exclusive leathers and trims for the interior. In
suspension is paired with the self-tracking
the area of infotainment, there is the MMI as used
trapezoidal-link rear suspension adopted from
on the A8 with a 7-inch colour monitor that can
the Audi A8 – a combination used on both front-
for instance be extended by a navigation system
wheel-drive and quattro versions. Together with
with DVD and BOSE surround sound.
servotronic as standard and the excellent value
|
14 15
. . . Glinting asphalt. The engine’s rich hum. Her favourite song on the radio. It’s his
privilege . . . km 27.5
for negative rear-end lift, the new A6 offers un-
V6 3.2 FSI petrol engine with an output of 188 kW
rivalled handling and reliable directional stability
(255 bhp). This engine exhibits a peak-torque
all the way up the speed range.
range reminiscent of a TDI engine and thus offers
The basic characteristic of the A6 suspension
a superbly sporty power characteristic. At the top
is its constantly active response with precisely
end of the range, there is a 4.2-litre, eight-cylinder
defined self-steering behaviour and unequivocal
engine developing 246 kW (335 bhp).
agility. At the same time, the new Audi A6 always
Depending on which engine is chosen, there
upholds the standards of a luxury-class saloon
is a choice of a six-speed manual gearbox and a
in terms of vibrational and suspension comfort.
six-speed tiptronic automatic transmission. The multitronic continuously variable automatic trans-
Driving force
mission will become available at a later date. The
There will be an attractive range of engines avail-
tiptronic transmission and quattro permanent
able for the new Audi A6 right from its market
four-wheel drive are standard equipment in
launch at the end of April 2004. Customers have
conjunction with the ultra-high-torque V8 4.2 and
four high-performance engines to choose from,
V6 3.0 TDI engines. The tiptronic transmission
all of them meeting the stringent EU4 exhaust
can also be operated via shift paddles on the
emission standards and offering an attractive
steering wheel if desired.
selection of outputs and torques. The V6 3.0 TDI features the latest-generation common rail fuel injection system with piezo injectors. This system is capable of injecting the fuel at pressures of up to 1,600 bar. This makes the engine run even more quietly, while boosting its output. The impressive 450 Newton-metres of torque, which the engine actually develops at barely more than idle speed, assures ample lowend power. Of the range of petrol engines, the new V6 2.4 developing 130 kW (177 bhp) constitutes a comfort-oriented entry-level engine. The latest FSI technology from the world of motor racing has been incorporated into the design of the powerful
With its thrilling characteristics, the destiny of the new Audi A6 is already clear: it will lead the way through its design and performance.
Product Strategy
. . . He gently increases pressure on the accelerator pedal. There it is, routine imbued with
passion. km 30.2
|
16 17
Technology
Total distance: 467.8 km Journey time: 4:29 hours Vehicle: 12-cylinder Audi A8 L
Distance in km
Destination
Description
100.7
Urge
Tunnel
102.9
Ambition
Urban expressway
232.1
Stature
By-pass
435.8
Safety
Motorway
467.8
Success
Group HQ
He is accustomed to . . .
. . . being in the leading pack. The
urge to get ahead is his defining trait. Always and everywhere . . . km 100.7
|
18 19
. . . The conviction of being good: the natural
ambition of a winner. Shifting up to sixth gear . . . km 102.9
A unique blend of many individual strengths Finding a unique blend of technical strengths is the Audi philosophy when developing pioneering components and models. This is illustrated by two examples: the new V8 TDI engine and the LED lighting technology that is now finding its way into Audi’s production models.
The latest remarkable example is the new 4.0-litre V8 TDI, which is used in the A8. It lends this lightweight luxury saloon the attributes of a top athlete. Moderate fuel consumption and plentiful refinement also make the A8 4.0 TDI quattro the ideal companion for long journeys. The most powerful V8 diesel engine in the world The new model represents the addition of a further sporty version to Audi’s range. The V8 TDI engine in the Audi A8 is currently the highestpowered, highest-torque V8 diesel engine in any production saloon car, developing 202 kW 4.0-litre V8 TDI biturbo engine with two intercoolers
(275 bhp) and 650 Newton-metres of torque. Its peak torque of 650 Newton-metres, which is achieved from engine speeds of 1,800 to 2,500 rpm, offers a quality of traction across the entire
The new V8 TDI engine
road-speed range that can otherwise only be experienced in sports cars.
Another landmark achievement in diesel
The 4.0-litre V8 TDI biturbo with two inter-
technology for Audi
coolers is a further representative of Audi’s new
Substantial torque, high performance, and
family of V-engines, which already includes the
outstanding acceleration and pulling power: all
4.2-litre petrol versions in the Audi S4 and Audi
characteristics of a top athlete.
allroad quattro 4.2. One significant new feature of
Audi has repeatedly restated its pioneering
the V-engines is that there is a chain drive for
role in the development of ultra-efficient, high-
the camshafts and auxiliaries instead of a toothed
performance TDI engines since as far back as
belt.
1989.
Technology
. . . The resolve to show true
stature. Leading with style and on merit. Meticulous and cultured . . . km 232.1
Compact design and improved valve control for
Higher output but lower consumption
exceptional refinement
The economical way in which the V8 generates
Other technical highlights of the 4.0-litre V8 TDI
its power is just as impressive as its power and
include its very compact dimensions and low
torque curves. In the Audi A8 4.0 TDI quattro, this
weight. The engine measures just 516 millimetres
engine version achieves an overall consumption
in length, and it weighs in at only 270 kilograms.
of just 9.6 litres of diesel per 100 kilometres
These notable figures are attributable to the
for the EU driving cycle. Despite having 37 kW
compact chain drive and the newly developed
(50 bhp) more power and despite the higher
engine block. The latter is made from vermicular
weight of the vehicle, this figure actually under-
graphite cast iron, a material that exhibits twice
cuts the consumption of its predecessor, the
the strength of conventional grey cast iron yet
A8 3.3 TDI quattro. The 4.0-litre V8 TDI thus makes
weighs around 15 percent less.
the Audi A8 the perfect long-distance vehicle: one
In conjunction with the virtually play-free camshaft drive, the new valve control with roller
tankful of fuel will be sufficient for significantly more than 900 kilometres.
cam followers is able to demonstrate its advantages: it reduces the level of mechanical noise generated by the valve gear and is instrumental to the V8 TDI’s impressive refinement. The rigid design of the engine block and the unit’s effective encapsulation also help to lessen the sound emitted by the eight-cylinder engine. More efficient combustion with new common rail technology A second-generation common rail system takes charge of mixture preparation in the V8. The injection pressure has been increased to 1,600 bar. This, in conjunction with the solenoid-valve injectors with 7-hole nozzles, results in even finer atomisation of the fuel and consequently in extraefficient combustion. The advantages are twofold:
Audi A8 with 4.0-litre V8 TDI engine
extra power and torque, coupled with lower fuel consumption and emissions.
|
20 21
. . . Just like his A8. Indicating to pull out to overtake. Accelerating.
Safely moving into the fast lane . . . km 435.8
Ultramodern LED lighting technology in
required, for example indicator lights or the car’s
series production
rear lights. Audi is opening a new chapter in the annals of technology by introducing these high-
LED headlights as standard on the new A8 L 6.0 quattro
intensity, high-performance LED headlights. Audi first unveiled this innovative technology
LED headlights are not only brighter, but more-
on the much-acclaimed concept studies exhibited
over use less energy than conventional bulb-type
in 2003: on the Audi Pikes Peak quattro in the form
headlights. And LEDs have a much longer operat-
of fog lights, and on the Audi Nuvolari quattro
ing life – much longer, in fact, than the average
and Audi Le Mans quattro in the headlights.
life of a vehicle. This promises to render the task
LEDs also offer clear advantages when it
of changing a bulb a thing of the past. These
comes to vehicle design: because they require
advantages can already be exploited: the Audi
less installation space than other light sources,
A8 L 6.0 quattro is the first car in the world to be
being only half as deep as conventional head-
equipped with LED daytime driving lights.
lights, they give the designers greater freedom for the design of the vehicle’s front end.
Pioneering technology The letters LED stand for “light-emitting diode”,
Innovative solution for dynamic adaptive lights
a technology that has until now only been used
That is not all, because LED technology harbours
for applications where low levels of light were
yet further potential for the future. For example in the field of adaptive headlights, which appeared for the first time on volume-built Audi vehicles in the guise of Audi adaptive light and are now available on the A8. LEDs can in future be used as the light source for dynamic adaptive headlights, circumventing the need for any moving parts. By means of software-controlled activation of additional compact lighting elements, the width, direction and intensity of the light cone can be specifically adapted in line with road speed and steering angle. This brings clear safety benefits for the driver.
Headlights in the Audi A8 L 6.0 quattro with LED daytime driving lights
Technology
. . . Savouring
success with all the senses. Every day anew. He’s now reached today’s destination. km 467.8
|
22 23
Environment and Society
Total distance: 77.1 km Journey time: 1:12 hours Vehicle: Audi A4 Avant
Distance in km
Destination
Description
10.8
Freedom
Artists’ quarter
35.9
Poise
Motorway
53.5
Happiness
Coastal road
69.8
Joie de vivre
Avenue
77.1
Charm
Club house
On the move . . .
. . . in search of encounters. Discovering new worlds.
Freedom every day. It’s there for the taking . . . km 10.8
|
24 25
. . . Carefree moments. Relaxed. Unlimited independence.
Poised. Between Heaven and Earth . . . km 35.9
Embracing responsibility: corporate culture at Audi As a supplier of exclusive cars, Audi bears considerable responsibility for the environment and society. In order to live up to its responsibilities, the company is constantly improving its efforts to protect the environment – for example by using district heating and environmentally compatible methods of testing engines. Audi’s social involvement likewise has a great many facets. School projects and initiatives for young people are just some of the many activities in which it was involved in 2003.
management system satisfies the rigorous requirements of the European Community system EMAS. This scheme goes further than merely demanding compliance with all the relevant environmental regulations, and lays down further requirements for efficient environmental management. Thanks to continuous improvements to its environmental protection measures, the Audi Ingolstadt plant received confirmation of its successful participation in this extensive examination for the third time in 2003. As well as Ingolstadt, the Neckarsulm plant, AUDI HUNGARIA MOTOR Kft. in the Hungarian city of Györ and COSWORTH Saves time and energy: the “cold test” examines the loadability of TDI engines with the aid of an electric motor
TECHNOLOGY LIMITED in Great Britain have been accredited in accordance with the EU EcoManagement and Audit Scheme.
Responsibility for the environment
Preserving resources by using district heating Protecting the environment above all means
Efficient environmental management
deploying vital resources responsibly and using
Ecological resources management is a declared
alternative methods of energy generation. Being
corporate aim of Audi, occupying a prominent
connected up to the district heating network of
position within its portfolio of corporate pro-
the Ingolstadt refuse incineration plant (MVA) is
cesses. Audi has participated voluntarily in the
the latest environmental project. A large portion
EU Eco-Management and Audit Scheme (EMAS)
of the heat generated by this plant had previously
since 1995. Last year, external inspectors once
gone to waste. As the MVA generates a constant
again examined whether the Audi environmental
amount of heat, it is not worthwhile supplying
Environment and Society
. . . The A4 takes them closer to
happiness. Shows them the sea, the beach, waves for surfing . . . km 53.5
private households with district heating during
Cold-testing avoids emissions
the summer months in view of their low con-
The Hungarian subsidiary AUDI HUNGARIA
sumption. Audi, on the other hand, uses heat
MOTOR Kft. based in Györ likewise demonstrated
all the year round, for example for technical
last year how ecological and economic advan-
processes such as cavity sealing.
tages can go hand in hand. The “cold test”
Since the start of 2004, the MVA has been
involves propelling engines exclusively by means
supplying an amount of up to 94,000 megawatt-
of an electric motor for purposes of load-testing.
hours of heat per year in the form of hot water.
The four-cylinder TDI diesel engine completes the
The water, which has a temperature of 125 degrees
most important operational and leak tests within
Celsius, flows to the Audi site under pressure
30 seconds. As no combustion process takes
along 400 millimetre wide, highly insulated pipes.
place inside the engine – in contrast to a hot test
It is then fed into the company’s network. This
– no fuel and coolant supply is necessary, and
arrangement enables Audi to cut its natural gas
no emissions are generated.
consumption and consequently reduce carbon
The advantages of this approach are not
dioxide emissions by up to 19,000 tonnes per
merely ecological: because it reduces the overall
year.
time spent testing each engine from as much as nine minutes to just under two minutes, the
Tapping new potential
number of test rigs and therefore the space
Audi has significantly reduced its energy and
required can be substantially reduced. All in all,
water consumption in recent years, as well as the
the method saves time and money, while yielding
levels of waste generated. The company has
superior results. The cold test at Györ is now
tapped further potential for savings in the field of
incorporated into the assembly process as a regu-
energy management by reducing its natural gas
lar series production process. Every single one of
consumption thanks to the use of district heating.
the 2,230 pump-injector diesel engines built each
The aim is to continue exploiting all possible ways
day is cold-tested. Audi will gradually introduce
of cutting consumption and to make sure that
cold-testing for other engine families.
the relevant information is exchanged between all the departments concerned. To perform this demanding task, a circle of energy representatives and an energy team were established to identify and implement further potential ways of saving.
|
26 27
. . . Where is
joie de vivre greater? When they reach their destination? Or on their way there? . . . km 69.8
Corporate citizenship
young women to choose careers in technical and scientific areas. A total of 500 school-age girls
A tradition of responsible action
visited the two German plants on that day to gain
As a major employer and an international-scale
an insight into the relevant occupations at Audi.
company, Audi bears considerable social responsibility. Audi has been living up to this respon-
Audi promoting newspapers in schools
sibility for many years and is involved in a wide
Audi staged the projects “KLASSE!” and “ZiSch –
variety of areas. These include supporting facili-
Zeitung in der Schule” in conjunction with the
ties for the disabled and social organisations,
local newspapers in Ingolstadt and Heilbronn.
organising benefit concerts and cultural events,
Around 7,000 pupils at all types of schools took
and teaming up with universities or local initia-
part in the scheme in 2003. The aim of the pro-
tives.
jects is to promote reading and writing skills. With the aid of specially created teaching materi-
Audi supports projects for young people
als, the pupils composed reports and articles,
Promoting school projects and initiatives for
which were then published in the newspapers.
young people is a particular priority for Audi,
Audi sponsored a newspaper subscription for
which was involved in a whole range of events last
every class involved and offered pupils the oppor-
year: examples include the nationwide “Girls’
tunity to participate in a wide range of events,
Day 2003” which has the purpose of encouraging
including factory tours, environmental projects and job application courses, which the pupils then reported on in their articles. Schools Development Day in Ingolstadt Both Audi and schools are keen to promote IT skills as a key qualification of the future. For this reason, Audi hosted a Schools Development Day on the subject of information technology. Secondary schools from the northern part of Upper Bavaria and Audi trainees presented their IT projects to 1,000 visitors and illustrated ways of incorporating IT into lessons.
Dr. Neumann, Board Member for Human Resources, learns more about the IT projects on the Schools Development Day
Environment and Society
. . . Certain questions cannot be answered easily. Precisely this is what lends them their special
charm. km 77.1
|
28 29
Employees
Total distance: 32.8 km Journey time: 0:28 hours Vehicle: Audi A3
Distance in km
Destination
Description
Excitement
Beach
14.8
Harmony
Country road
22.5
Security
Promenade
26.5
Expectation
Avenue
32.8
Anticipation
Viaduct
2.3
Fountains of spray . . .
. . . Beads of water on the windows.
Excitement from the rear. He smiles: the boys are having fun . . . km 2.3
|
30 31
. . . The A3 glides along the country road. Sheer
harmony. Inquisitive gazes scan the horizon . . . km 14.8
Working at Audi means shaping the company Entrepreneurial success is based on entrepreneurial actions. For the true spirit of enterprise to function, employees – from trainee to top manager – need a high degree of freedom to influence matters and make their own decisions. Those who work at Audi are actively involved in the company’s success, which for many people provides the assurance of apprenticeships and jobs with a secure future.
Entrepreneurial ideas and actions
culture and fundamental outlook and approach of the entire Audi workforce. It signals the defini-
Decision-making in a team
tive break with the traditional form of labour
This is the motto of Christine Eberlein, Head of
organisation, which consciously and concertedly
Series Production Modifications. “Motivating
restricts decision-making to as few people as
employees means involving them in decisions –
possible. Audi believes that entrepreneurial dedi-
that’s the only solution. Even when decisions with
cation is a core aspect of the ongoing develop-
major repercussions have to be taken, I rely 100
ment of the individual and therefore of the entire
percent on my team, in which everyone has their
company.
own area of responsibility.” Christine Eberlein’s management style symbolises the corporate
The objective: satisfied customers The customer is always at the centre of successful enterprise. Entrepreneurial actions and attitudes are characterised first and foremost by customer centricity and the awareness of all employees of quality and cost issues. But enterprise also includes inventiveness, courage and the willingness to make changes. These in turn are dependent on the employees having the necessary expertise, dedication and responsibility. The Board of Management would expressly like to thank the entire workforce and the employees’ elected representatives for their personal dedication.
Christine Eberlein: “As their superior, I rely on the skills and commitment of my workers.”
Employees
. . . The boy is asleep on the back seat. Next to him his teddy.
Security that can be sensed . . . km 22.5
Expertise
Qualification structure of blue-collar workers (AUDI AG)
Audi employs people with wide-ranging experi-
Average in thousands
ence and varied cultural backgrounds. One thing
1999
2000
2001
2002
2003
29.3
31.7
32.0
31.2
31.1
18.9
20.9
21.2
20.9
21.1
that they all have in common is a high degree of expertise, in a broader sense than mere specialist
30
skills. Extensive methodological and social skills are also among the qualities required of
20
Audi employees. These characteristics have been instrumental to Audi’s ascent to the status of a premium-segment manufacturer over the past few years.
10 10 Blue-collar workers of which
Dedication
skilled workers
Audi employees actively shape the company for which they work. The opportunity to suggest improvements has long been a feature of Audi’s
Qualification structure of white-collar staff (AUDI AG)
corporate culture. In the year 2003 a total of
Average in thousands
62,403 suggestions were submitted, resulting in
1999
2000
2001
2002
2003
9.6
10.2
10.7
11.3
11.7
3.7
3.9
4.3
4.6
5.4
savings of EUR 45.6 million. 19
Responsibility Each individual is in a position to improve Audi’s
16
competitive position and thereby safeguard their own job by demonstrating dedication and responsibility. These qualities in addition pave the way for the creation of new jobs and apprenticeships. By taking on responsibility, employees can also reap financial rewards through profit-sharing
13 10 White-collar staff of which university graduates
and bonuses.
|
32 33
. . . Mountains in the morning light. Eager
expectation. Heading for adventure. On the bridge . . . km 26.5
Prospects for young people
This has been made possible by the introduction of a new type of training model: by means of
Audi training campaign
offset training times that are synchronised with
Stefanie Russer and Michaela Heigl are appren-
Audi’s production shifts, maximum use can be
tices at Audi, in the areas of mechatronics and
made of the training facilities and the apprentices
tool mechanics. “I always wanted to learn a tech-
can be integrated efficiently into the production
nical job,” remarks Michaela. “When I looked at
procedures.
what Audi were offering, I knew that was what I wanted to do.” There has been an ongoing train-
Ways out of unemployment
ing campaign at Audi for the past three years,
Particularly in times of economic difficulty it is
as part of the “Initiative for More Training”. 675
important to offer young people bright prospects
young people, including 143 women, were able to
for their working life. The Audi training campaign
embark on an outstanding, secure apprentice-
is therefore not limited just to school-leavers. By
ship in 17 different occupations in 2003. The total
launching the “AQuA” project (recruitment and
number of apprentices has gradually risen to
training for the unemployed) in 2003, Audi aims
more than 2,000 since the initiative was launched.
to re-integrate the unemployed back into the world of work. The scheme, which runs for two years, is open to young persons with no typical training in the car industry and who have been unemployed for between three and twelve months. In partnership with the employment office and the Chamber of Commerce, participants can sit a Chamber of Commerce examination in “Automobile Manufacturing” at the end of the period. This certificate then offers the prospect of a long-term employment contract at Audi and fulfils the requirement for a place at the school of master craftsmen and for taking a master craftsman’s diploma. 50 unemployed persons commenced the training measures, which
Technology also appeals to women: more and more young women are taking up technical apprenticeships at Audi
comprise both theory and practicals, last June. The success rate to date has easily exceeded expectations and confirms both the participants’ high level of motivation and the appeal of the programme.
Employees
. . . In
anticipation of spending the day together. A day that is like no other. Satisfaction. km 32.8
|
34 35
Market and Customer
Total distance: 20.2 km Journey time: 0:19 hours Vehicle: Audi TT Roadster
Distance in km
Destination
Description
10.0
Appeal
Alpine road
12.8
Speed
Mountain pass
13.9
Adrenaline
Hairpin bend
14.5
Hot and cold
Snowscape
16.1
Fulfilment
High mountain road
18.7
Ideal line
Bend
20.2
Pride
High plateau
The lure for adventure . . .
. . . beyond the familiar.
Appealing, desirable, alluring. There’s absolutely no reason to resist . . . km 10.0
|
36 37
. . . He loves glamorous backdrops. But they have to be cool. Step on the
speed. Into the bends . . . km 12.8
Ten years of growth Over the past ten years, Audi has established itself at the vanguard of the premium segment through innovative technologies and multiple design awards. Record-breaking vehicle sales for the tenth year in succession serve as both an endorsement and an encouragement. Our objective for the future? To captivate customers every day anew with “Vorsprung durch Technik”.
Market news
Partnership with Bayern Munich and Real Madrid As the automotive sponsor of the championship-
Audi in Germany
winning teams Bayern Munich and Real Madrid,
The largest sales market for the Audi brand is
Audi was able to attract many football enthusiasts
Germany. Around one third of Audi vehicle sales
to its brand last year. The teams and managers
in 2003 were in Germany. Despite declining sales
of both clubs drive Audi cars. David Beckham,
Audi was able to maintain its market share of
Real Madrid and England’s midfield star, likewise
7.4 percent at the previous year’s high level. The
took receipt of his Audi – an A4 Cabriolet – at the
new Audi A3 has enjoyed an excellent sales start
start of November.
in Germany. Since its market launch in May 2003, this model has already clocked up sales of 40,456.
Audi worldwide The proportion of Audi sales outside Germany has been steadily rising for a number of years. In 2003, exports accounted for 69.1 percent. Above all Austria, Great Britain, Italy and the Netherlands were burgeoning markets within Western Europe, which as a whole remained flat. Sales were likewise higher in the USA, Audi’s largest export market. The Audi A4 Cabriolet and the new Audi A8 in particular were received very positively on the US market. The new A6 is expected to provide a boost to growth in 2004. China advanced to third place in the export statistics, posting easily the steepest rate of growth. There was also a marked increase in sales in
David Beckham together with Dr. Martin Winterkorn and Florentino Pérez, President of Real Madrid
Japan. The Audi TT in particular is proving very popular there.
Market and Customer
. . . Frost swirls through the air.
Adrenaline making your scalp tingle. Ice crystals on your skin . . . km 13.9
The success story of the new A8
Audi A8 in China
Within the space of one year, the new Audi A8 has
The new Audi A8 made its first appearance in
carved out a place for itself as the most sporty
China to mark the opening of the first Audi Forum
model in the luxury class. Superlative interior com-
in Asia. Beijing is home to our ninth showcase
fort and sporty dynamism are the defining char-
facility, alongside other major cities such as
acteristics of this luxury long-distance saloon.
New York, Paris, London and Berlin. Visitors can
Since the market launch of the A8 in November
discover more about the Audi model range on
2002, more than 21,600 units have been sold and
a floor area of around 1,000 square metres. The
a large number of engine and equipment items
highlight of the Forum is an exclusive A8 lounge.
added to the range. The Audi A8 will once again
Audi aims to strengthen its position as the market
be in the spotlight in the early part of 2004, when
leader in China’s premium segment with the
a 331 kW (450 bhp) twelve-cylinder engine and a
luxury saloon, the Audi A8.
3.0 TDI version will be launched. Major markets
Unit sales
Year-on-year
Market share
Year-on year per-
2003
percentage
in 2003 in %
centage change,
change Audi worldwide
769,893
3.7
Germany
overall market
237,786
– 2.4
7.4
– 0.5
USA
86,421
0.8
2.0 1
– 3.1 1
Great Britain
70,107
6.9
2.7
0.6
China (incl. Hong Kong)
63,531
71.5
2.8
69.6
Italy
51,341
2.5
2.2
– 2.5
Spain (incl. Canary Islands)
41,124
0.2
3.1
3.8
France
37,467
– 8.2
1.9
– 6.3
Belgium
19,228
– 2.6
4.4
– 1.9
Austria
16,933
7.8
5.5
7.4
Switzerland
15,097
– 12.2
5.9
– 8.3
Netherlands
14,268
7.7
2.4
– 4.3
Japan
13,137
12.8
5.4 1
– 4.9 1
Sweden
11,645
– 3.9
4.2
2.6
Brazil
8,387
– 21.4
0.7
– 4.1
Canada
7,861
8.6
0.9
– 7.4
Lamborghini worldwide
1,305
207.8
1
Foreign brands only
|
38 39
...
Hot and cold. A gentle touch of the steering wheel. The car glides smoothly over the ice . . . km 14.5
China’s love affair with Audi
structure projects are for example in planning or under construction. These are intended to
Market leader in the premium segment:
meet growing demand for energy and water, and
a success with a precedent
improve the logistics situation.
Buying their own car is the overriding dream of many Chinese. And most of them aspire not
Sales potential of five million vehicles
simply to own just any make of car, but an Audi.
First-time vehicle registrations in China rose by
Audi is the market leader in the premium seg-
69.6 percent to just under 2.3 million units in 2003.
ment and the best-known car brand in China. This
The car industry is now the undisputed driving
success story began 15 years ago when produc-
force behind China’s economic development as
tion of the Audi 100 commenced under licence.
a whole. The liberalisation of the car market,
Today, Chinese customers are able to choose from
prompted by the country’s accession to the WTO,
a broad range of models from the Audi A4, which
now means that all major international car manu-
is also available in the guise of the Cabriolet,
facturers have entered into partnerships with
through the Audi A6 and Audi A8, to the Audi TT
local Chinese companies. In spite of growing
Coupé and TT Roadster. Thanks to this broad
competition, the country’s as yet very low vehicle
selection, China has emerged as Audi’s third-
density of around one vehicle per 100 inhabitants
largest export market within just a few years. The
harbours considerable potential for future growth.
task is now to build on this position – a major
The gradual lifting of vehicle import restrictions
challenge in a market that is experiencing a dynamic rate of change. China’s car market is unfolding at fast-forward, undergoing a rapid transformation that took many decades in certain other markets. WTO membership stimulates growth The sustained dynamism of the Chinese economy has produced a string of record-breaking years. All indicators such as gross domestic product, foreign direct investment, currency reserves and export and import volumes have posted growth rates way above the average for the global economy. In particular, China’s membership of the World Trade Organisation has lent added momentum to this dynamic growth. Various major infra-
The Audi A6 has been built at Changchun since 1999, when it became the first luxury vehicle to be built in China
Market and Customer
. . . Dynamism cannot be held in check.
Fulfilment
begins when expectations become reality . . . km 16.1
by 2006 and the 2008 Olympic Games in Beijing
and Volkswagen AG, was established in 1991.
will provide additional impetus. It is estimated
Audi entered the joint venture in 1995 as the
that sales of passenger cars will reach around five
third interested party, with a stake of ten percent.
million by 2008. When all factors are taken into
This signalled the end of Audi production under
account, the forecasts point towards rapid, stable
licence and heralded in a new era of partnership.
growth for China for some years to come. Volume production from 1996 Saving up for their first car
Audi has been building cars in larger quantities
The per capita income of the urban Chinese popu-
at FAW-Volkswagen since 1996: between 1996
lation rose year on year by nine percent in 2003.
and 1999 it initially built the Audi 200, then a
In absolute terms, levels of income are still rela-
long-wheelbase version of the Audi A6 designed
tively low compared with Western Europe: an em-
specifically for the Chinese market starting in
ployee in Beijing, for example, earns an average
September 1999, followed by the Audi A4 in April
of USD 850 per month. Private savings totalling
2003 as its second locally-built car line. Produc-
EUR 1.2 trillion are nevertheless the third-highest
tion of the A4 and A6 models ensures that the
in the world. The Chinese rank buying their own
available capacity at FAW-Volkswagen is utilised
car as their third biggest priority, behind funding
to the full. To mark the 50th anniversary of its
their children’s education and buying their own
partner FAW, the foundation stone for the exten-
apartment.
sion to FAW-Volkswagen was laid in July 2003. Within just a few years, this operation has made
Audi active in China since 1988
the leap from low-volume licence production of
When Audi forged initial contacts with Chinese
the Audi 100 to large-scale production by a
counterparts some 15 years ago, the project
modern joint venture.
still appeared somewhat exotic. Although many Western entrepreneurs were aware of the size
Over 250,000 cars built locally
of the country and its population, there was a
Over a quarter of a million cars with the four-ring
widespread belief that China was insufficiently
badge had been built in China by the end of 2003.
attractive as a sales market. With hindsight, the
Vehicle sales – over 75 percent of which are to
scope of what was initially agreed between Audi
private customers – were up 71.5 percent on
and the Chinese partner FAW (First Automobile
2002 to 63,531. This total includes mainly Audi A4
Works) in Changchun (Northeast China) looks
and Audi A6 models, predominantly from local
very modest. The joint venture initially involved
production as well as imported vehicles, such as
building four and five-cylinder Audi 100 models
the Audi A8, 1,265 of which were sold in China
under licence. The FAW-Volkswagen Automotive
in 2003. The dealer network now numbers 89 out-
Company, Ltd., a joint venture between FAW
lets in 55 cities nationwide, and ranks as the
|
40 41
. . . Rapid reactions. A quick spurt at just the right time. Finding the
ideal line. Ambitions . . . km 18.7
benchmark for the competition. Audi launched
it has a young population: 42 percent of the
a service quality campaign in summer 2003 in
1.3 billion Chinese are under 40, and the average
order to build on this leading position. There are
age is less than 32. The economic reforms of
now 62 Audi Service Mobiles – specially equipped
Mao’s successor Deng Xiaoping paved the way
vehicles providing a breakdown recovery and
for China’s opening up to the West in 1978. China
emergency service – helping to establish an even
has since emerged as a major economic force
closer service network in this vast country.
that is increasingly looking to play a role on the international stage.
Rich diversity of cultures and languages For all the talk of globalisation, the principle still
Knowledge carves out an advantage
holds true that all business is local. This means
Audi is now benefiting from 15 years of experi-
that it is vitally important to have a knowledge
ence in operating in China. Particularly the
and understanding of the culture of one’s coun-
Audi A4 has proved to be the ideal product for the
terpart. Regional traditions and particularities
growing number of lifestyle customers. Audi
also need to be taken into account. China is a
reinforced the brand’s status, especially among
multinational state with over 50 national minori-
young customer groups, by staging various major
ties and tribes. They speak a total of more than
events in 2003. The most spectacular of these
13 different languages and dialects. Though
were an Audi cavalcade along the boulevard past
China’s culture dates back more than 5,000 years,
Tiananmen Square, led by the multiple Le Mans winner Emanuele Pirro in the Audi R8, and Real Madrid’s match in Beijing sponsored by Audi. Events such as these are all part of that wealth of experience that will continue to give Audi a vital advantage in the Chinese car market of the future.
Emanuele Pirro, the multiple Le Mans winner, driving the Audi R8 past Tiananmen Square
Market and Customer
. . . Calculation. Courage. He pauses out of sheer
pride. His pulse is racing. Above him, only the sky. km 20.2
|
42 43
Group Companies
Main companies within the Audi Group AUDI Aktiengesellschaft
AUDI HUNGARIA MOTOR Kft.
COSWORTH TECHNOLOGY LIMITED
Automobili Lamborghini Holding S.p.A.
quattro GmbH
Automobili Lamborghini S.p.A. Motori Marini Lamborghini S.p.A. Lamborghini ArtiMarca S.p.A. AUTOGERMA S.p.A.
Successful financial year for Audi Hungaria
AUDI HUNGARIA MOTOR Kft. engine production
In the year that it celebrated its tenth anniversary, AUDI HUNGARIA MOTOR Kft., based in Györ, Hungary,
Thousand units
1999
2000
2001
2002
2003
1,002
1,061
1,220
1,280
1,335
was able to repeat the successful business performance of past years in 2003. The financial year saw a further rise in production and significant capital
1,200 900
investments in the engine production facilities. The purpose of the investment campaign was to add
600
new engines featuring pioneering technology to the product range. During the year under review, AUDI HUNGARIA MOTOR Kft. also focused on preparing all
300 0
corporate divisions for Hungary’s forthcoming accession to the European Union. AUDI HUNGARIA MOTOR Kft. built a total of 1,334,985 (1,280,067) engines. This represents an
The launching of the new 3.2-litre, six-cylinder engine
increase of 4.3 percent on 2002. Of this total,
for the TT family, combined with the innovative Direct
1,048,128 (986,423) were four-cylinder engines,
Shift Gearbox DSG, should help to stabilise sales
238,387 (279,555) six-cylinder engines and 48,470
figures at a high level in 2004.
(14,089) eight-cylinder engines. The marked rise in
Following the successful market launch of the
demand for the high-performance 4.2-litre, eight-
new Audi A3 in the spring of 2003, 1,616 of the
cylinder engines and the economical four-cylinder
previous Audi A3 model (18,895) were built on behalf
pump-injector engines was notable.
of AUDI AG at AUDI HUNGARIA MOTOR Kft.
The engines built in Györ are distributed to
Investments in property, plant and equipment
Volkswagen Group production plants worldwide.
including intangible assets totalled EUR 319 (253)
There they are fitted in various models of the
million in the year under review. The purpose of this
Volkswagen, Audi, SEAT and Škoda brands.
spending was principally to boost production capac-
Production of the Audi TT showed a slight downturn, reflecting the advanced stage of its product life-cycle, from 34,711 in the previous year to 32,337.
ity, broaden the product range and further expand the plant infrastructure. The V6 engine production line, where production
This total comprised 20,807 (21,488) of the Audi TT
of the new generation of V6 engines (3.2-litre FSI and
Coupé and 11,530 (13,223) of the Audi TT Roadster.
3.0-litre TDI) has started, accounted for the bulk of
capital investment spending. Meanwhile the AUDI
In spite of the difficult market conditions
HUNGARIA MOTOR Kft. product range of four-cylinder
for foundry products and engineering services,
versions was extended by the advent of the new
COSWORTH TECHNOLOGY LIMITED was able
generation of 2.0-litre FSI turbo engines.
to improve its revenue situation and boost revenue
AUDI HUNGARIA MOTOR Kft. was able to boost its revenue by 4.8 percent to EUR 3,726 (3,557) million in 2003. It employed an average of 4,939 (4,767) people
to EUR 162 (130) million. The workforce of COSWORTH TECHNOLOGY LIMITED averaged 813 (786) employees over the year.
in the year under review. Sales record for Lamborghini Cosworth Technology boosts revenue
Automobili Lamborghini celebrated 40 years of
COSWORTH TECHNOLOGY LIMITED, which has its
sports car manufacturing in 2003. The company,
headquarters in Northampton, Great Britain, provides
based in Sant’Agata Bolognese and founded in 1963
a full range of services for the development, pro-
by Ferruccio Lamborghini, ended its anniversary year
duction and diagnosis of engines and is thus able to
with a new production and sales record.
highlight its expertise as a one-stop partner for engine concepts. Projects for new engine concepts for various vehi-
To mark its fortieth birthday, Lamborghini launched a limited edition of the super sports car Murciélago. This special model, of which only 50 specimens were
cle manufacturers, encompassing everything from the
built, is distinguished from the production model by
initial draft to acceptance testing of the prototypes,
its paint finish in the exclusive colour “Artemis Green”
were successfully completed at the development
and by modifications to the interior equipment and
centre in Northampton.
outward appearance.
The foundry at Worcester, which operates using
The market launch of the new Gallardo model was
COSWORTH TECHNOLOGY LIMITED’s patented alu-
a further highlight of the financial year. Lamborghini’s
minium casting technique, specialises in casting core
second car line alongside the Murciélago put in its
engine components – cylinder heads and engine
maiden appearance at the Geneva Motor Show in the
blocks – of a very high quality standard. By systemati-
early part of the year. The Gallardo sets new stan-
cally improving its production systems, the company
dards in its segment as a high-performance sports
has steadily increased its productivity. Cosworth
car that is suitable for everyday driving. It is powered
Technology is manufacturing a new, highly sophisti-
by a newly designed ten-cylinder engine with a
cated product requiring precision casting in the guise
displacement of five litres and an output of 368 kW
of the cylinder head for the V10 Lamborghini engine.
(500 bhp), four-wheel drive and an aluminium body.
The production and assembly plant at Welling-
With its extreme, uncompromising and above all
borough includes engine assembly and commission-
utterly Italian character, the Gallardo lends further
ing operations, as well as the machining of engine
substance to Lamborghini’s brand presence.
components. 4,844 engines for the Audi RS 6 were
In the period under review, Lamborghini invested
built in 2003. In total, 6,541 (3,979) complete engines
above all in the new production line for the Gallardo
were built in the year under review. This represents
and in a building that will house the service, vehicle
an increase of 64.4 percent. Cosworth Technology
restoration and design departments from early 2004.
reached an important landmark in the process
Investment spending in the 2003 financial year
of further diversifying its business activities by also
totalled EUR 63 (88) million.
concluding a long-term supply agreement for the machining of industrial engines. The electronic developments of the subsidiary COSWORTH TECHNOLOGY, INC., based in Novi, USA, raised the company’s profile on the American market as an expert partner for vehicle information and diagnostic systems. Cosworth Technology extended its business area to Europe through new orders for the installation of electronic diagnostic systems.
|
44 45
Production by Automobili Lamborghini S.p.A.
Autogerma recorded sales of 283,934 (303,086)
reached a new record level in 2003. A total of 1,357
vehicles in the 2003 financial year. This produced
(442) vehicles sporting the brand emblem with the
revenue of EUR 4,480 (4,807) million, a shortfall of
bull were built, comprising 424 of the Murciélago and
6.8 percent on the previous year.
933 of the Gallardo. The production volume was
Sales of vehicles of the Audi and SEAT brands
consequently three times that of the previous year.
posted slight growth. Sales of Audi vehicles totalled 51,341 (50,107). 41,057 (40,201) customers took receipt of a new SEAT. Sales of the Škoda brand
Automobili Lamborghini S.p.A. vehicle production
remained flat at 23,061 (23,051) vehicles. The withVehicles
1999
2000
2001
2002
2003
drawal of the previous Golf model and the launch of its successor on the Italian market in November
1,200
had an adverse effect on sales of Volkswagen passenger cars. As a result of the changeover, car sales of
900
the Volkswagen brand fell to 163,193 (183,626) units. The sales total for Volkswagen Commercial Vehicles
600
was likewise down on the previous year at 5,282 300
(6,101) units as a result of the changeover to the new Transporter.
0
Important events in 2003 included the market 252
291
280
442
1,357
launch of new models, the Audi A3 in May and the VW Golf in November, both of which were exception-
Lamborghini also enjoyed a sharp rise in vehicle sales
ally well received by the public. To improve standards
of almost 208 percent. A total of 1,305 (424) sports
of customer service, Autogerma set up a call centre
cars, comprising 415 of the Murciélago and 890 of the
for Italian customers of all Volkswagen Group brands
Gallardo, were shipped to customers worldwide. The
at the start of the year.
most important market was the USA, accounting for around 35 percent of sales, followed by Germany
Autogerma employed an average of 712 (695) persons throughout the year.
on 20 percent, Great Britain on 12 percent and Switzerland and Japan each on ten percent.
AUTOGERMA S.p.A. vehicle sales
Thanks to the new model, the revenue of the Lamborghini Group rose to around EUR 200 (93) mil-
2003
2002
lion in the 2003 financial year. The average number
Volkswagen Passenger Cars
163,193
183,626
of employees rose to 685 (567) as a result of the
Audi
51,341
50,107
increased production output.
SEAT
41,057
40,201
Škoda
23,061
23,051
5,282
6,101
AUTOGERMA S.p.A. affected by market conditions
VW Commercial Vehicles
AUTOGERMA S.p.A., based in Verona, is the Italian general importer for the brands of the Volkswagen
8.1%
1.9%
Group and has been a subsidiary of Lamborghini Holding S.p.A. since 2000. The company’s business progress last year remained subdued as a result
14.5%
of the protracted difficult market situation in Italy. As in the previous year, the car market as a whole contracted in 2003 and there were only just under 2.3 million cars registered as new, representing a downturn of about 2.5 percent.
18.0%
57.5%
Group Companies
quattro GmbH further expands business activities
quattro GmbH was able to step up its business
The core competence of quattro GmbH involves
activities quite substantially in 2003, boosting revenue
customising Audi vehicles with sporty and exclusive
year-on-year by around 83 percent to EUR 201 (110)
equipment. In this way, quattro GmbH helps to infuse
million. Sales of the RS 6 accounted for a sizeable
the Audi brand with even greater passion and distinc-
portion of this total.
tive appeal. quattro GmbH, which was established in 1983, has had four business areas since its reorgani-
New consolidated companies
sation in 1998: RS models, S line, Audi exclusive
The portfolio of companies consolidated under the
and Audi design lifestyle articles. It consequently has
umbrella of the Audi Group was enlarged in the 2003
an extensive product range that is sold all over the
financial year. New additions in Germany were Audi
world.
Synko GmbH, Audi Vertriebsbetreuungsgesellschaft
The Audi RS 6, which was launched in summer
mbH and Audi Zentrum Hannover GmbH. The
2002 in Germany, successfully carved out a niche for
business purpose of Audi Synko is to invest in Audi
itself as a high-performance vehicle in all major
dealerships in strategically important locations. The
markets, particularly the USA, in the 2003 financial
tasks of Audi Vertriebsbetreuungsgesellschaft involve
year. Its international sales success and the positive
providing dealer support for the Audi sales organisa-
market reception underline the important role of the
tion in Germany, including all sales, service and
RS models in enhancing the sporty positioning of
marketing functions, as well as customer care for the
the Audi brand. A total of around 7,000 of the RS 6
German market. Audi Zentrum Hannover is an Audi
were sold worldwide between its launch in June 2002
dealer and service operation.
and the end of 2003. quattro GmbH made further headway with extend-
Among foreign subsidiaries, Audi Australia Pty. Ltd., Homebush Bay (Australia) and Audi Japan K.K.,
ing the range of S line products. S line packages are
Tokyo (Japan) were fully consolidated for the first
now available in various forms for virtually all Audi
time. Audi Australia is the Australian general importer
models. In particular as a result of the launch of S line
for Audi vehicles. Audi Japan is responsible for the
exterior packages for the Audi A4 and Audi TT, quattro
management of Audi sales operations in Japan.
GmbH has responded to increasing customer demand
The companies FAW-Volkswagen Automotive
for equipment that provides an additional sporty
Company, Ltd., Changchun (China) and YANASE Audi
accent. This product line again enjoyed substantial
Sales Company Ltd., Tokyo (Japan) were consolidated
growth rates in the 2003 financial year.
for the first time at equity in 2003, in other words on
Office packages round off the range of quattro
the basis of the pro rata equity held in these compa-
GmbH custom equipment for the Audi A8 that is sold
nies. FAW-Volkswagen Automotive Company, Ltd.
as the Audi exclusive product line. These exclusive
manufactures Audi vehicles in China and is responsi-
communication and infotainment systems enable
ble for selling them. YANASE Audi Sales Company Ltd.
the Audi brand to target new customer groups and
– a joint venture between Audi Japan K.K. and
provide enduring evidence of the core competence
Yanase Co. Ltd. – operates the dealer network for
“Vorsprung durch Technik”. Audi exclusive also
Audi vehicles in Japan.
includes interesting features with which all other model series can be customised. The Audi exclusive product line emphasises the Audi brand’s ambitions as a premium supplier. Within the field of Audi design lifestyle articles, quattro GmbH was given responsibility for product design and marketing for the entire Audi brand group. The various brand profiles are being further raised and their market presence reinforced through the successful positioning of new, exclusive lifestyle articles.
|
46 47
Corporate Governance
German Corporate Governance Code
They moreover declared that the version of the
The German Corporate Governance Code contains
Code dated May 21, 2003 is complied with. However,
important regulations on the management and super-
the restriction applies that AUDI AG will not disclose
vision of German listed companies, in accordance
the remuneration of members of the Board of Man-
with internationally recognised standards of sound
agement (Section 4.2.4 Sentence 2) or the remunera-
and responsible corporate management. The purpose
tion of members of the Supervisory Board (Section
of the Code is consequently to promote the confi-
5.4.5. Para. 3 Sentence 1) individually, in order not to
dence of international and domestic investors, cus-
infringe privacy rights.
tomers, employees and the general public in the corporate management of German listed companies. Pursuant to Section 161 of German Stock Corpora-
The following qualifications moreover apply to the suggestions made in the Code: The Annual General Meeting will not be broadcast
tion Law, the Board of Management and Supervisory
on the Internet (Section 2.3.4.) in order not to infringe
Board must declare each year to what extent the com-
the individual shareholder’s right to privacy.
pany complies with or departs from the recommendations of the German Corporate Governance Code.
The scope for absent shareholders to contact the company’s proxy exercising voting rights (Section 2.3.3 Sentence 3, 2nd half of sentence) even during
Code extended
the Annual General Meeting is not relevant as
Following the introduction of the Code in 2002, an
the Annual General Meeting is not broadcast on the
initial amendment was made in 2003. The new recom-
Internet.
mendations centre on the transparency of the Board
The Code’s suggestion of taking long-term perfor-
of Management’s remuneration. The relevant section
mance into consideration in the Supervisory Board’s
(4.2) of the Code has been extended by the incorpora-
remuneration (Section 5.4.5 Para. 2 Sentence 2 of
tion of the recommendations “Individualised disclo-
Code) and taking one-off variable components tied to
sure of Management and Supervisory Board remuner-
business success into consideration in the Board of
ation”, “Ceiling for share options”, “Disclosure of the
Management’s remuneration (Section 4.2.3 Sentence 2
value of share options”, “Publication of the system of
of Code) is currently being openly discussed in depth
remuneration on the Internet” and “Information for
in specialist quarters. Instead of this suggestion
the Annual General Meeting on the system of remu-
being implemented now by AUDI AG, the outcome of
neration”.
the discussion is to be awaited before a final decision is reached.
Implementation of recommendations The Board of Management and Supervisory Board of
System of remuneration
AUDI AG considered the Code’s regulations in detail
The basic principles of the system of remuneration
in 2003.
for the members of the Board of Management are
The initial declaration submitted by the Board of
described in detail in the Notes to this Annual Report,
Management and Supervisory Board of AUDI AG on
under “Details of the Supervisory Board and Board
December 9, 2002 regarding the Code in the version
of Management”. This information is also available on
dated November 7, 2002 contained a qualification
the company’s website (www.audi.com/notes).
with regard to Section 5.4.5 Para. 1 Sentence 3, to the effect that the Board of Management and Supervisory
Internet declaration on the Code
Board were to await the next Annual General Meeting
The joint declaration of the Board of Management
on May 14, 2003 for proposing an amendment to
and Supervisory Board of AUDI AG on the recom-
the Articles of Incorporation on the regulation on
mendations of the German Corporate Governance
remuneration for the chair and members of Super-
Code was placed on the Audi website
visory Board committees.
(www.audi.com/cgk-declaration) on December 11,
On December 9, 2003 the Board of Management and Supervisory Board of AUDI AG declared that the aforementioned qualification had been rendered unnecessary by the resolution of the Annual General Meeting.
2003.
Audi Shares
Stock market developments
Audi share price (Munich Stock Exchange)
Developments on international stock markets were
International Securities Identification Number (ISIN):
dominated by the escalating conflict in Iraq at the
DE0006757008, German Securities Identification Number
start of 2003. Uncertainty as to its outcome and the
(WKN): 675700
resulting consequences prompted many investors to shift the emphasis of their investment activities
EUR
2003
2002
towards classic fixed-interest forms of investment.
Highest
294.90
318.00
This undermined the general share price level, which
Lowest
192.00
145.00
reached its lowest ebb in March when a number
Year-end price
225.00
191.00
of indices recorded their year-lows. The rapid end to the political tensions in April heralded in an initial recovery on stock markets which held up in the
Audi share price trend
second half of the year and was further underpinned
EUR
by the brighter economic prospects.
300
The German Share Index (DAX) initially suffered a downward trend from January. From opening at 2,898.68 points on January 2, 2003 the index fell to
250 200
a low of 2,188.75 points in mid-March. The tide then turned in the second quarter. The DAX climbed
150
steadily until the end of the year, reaching 3,965.16 points at the end of December. The Prime Automobile,
100
the sector index for German automotive shares,
50
experienced a similar pattern of development. This index fell from 284.07 points at the start of the year to
0
210.42 points in March, then recovered to a year-high
1999
2000
2001
2002
2003
of 356.77 points in September. The index closed the year on 350.96 points.
Highest
Year-end price
Lowest
Development of Audi shares Audi shares started the year on EUR 192, then
Ratios per Audi share
essentially remained within a corridor of EUR 205 to EUR 235 up until September. After briefly touching
EUR
2003
2002
EUR 271 in the fourth quarter, Audi shares finished
Net profit
18.91
17.94
the year on EUR 225.
Cash flow from operating activities
Profit transfer and compensatory payment for
Equity
shareholders
1
Volkswagen AG controls around 99 percent of the
68.01 131.59
58.201 114.88
The value per share has been adjusted due to the new method of reporting cash flow from operating activities from 2003
share capital of AUDI AG. On the basis of the control and profit transfer agreement between AUDI AG and Volkswagen AG, the outside shareholders receive a compensatory payment instead of a dividend. The compensatory payment is equivalent to the dividend paid on one Volkswagen AG ordinary share for the same financial year. The level of this dividend for the 2003 financial year will be determined by the Annual General Meeting of Volkswagen AG on April 22, 2004.
|
48 49
Management Report of the Audi Group
General economy and the sector
International car market Against the backdrop of only a slow economic recov-
Global economic situation
ery, car sales worldwide remained on a par with the
In 2003 the global economy recovered more slowly
previous year in 2003.
than initially expected. It was not until the second half
In Western Europe, 14.2 million vehicles were sold,
of the year that the economic situation picked up,
approximately 1.3 percent fewer than in the previous
aided by appropriate monetary and fiscal policies. The
year. The sharpest downturn was in France, where
main driving forces behind this development were
sales fell by 6.3 percent. Spain and Great Britain suc-
the US and Japanese economies. China has likewise
cessfully bucked the trend. Whereas the number of
contributed towards this economic recovery in recent
vehicles registered as new in Spain rose by 3.8 per-
years, with growth rates regularly in the order of eight
cent, sales in Great Britain remained at the previous
percent. Stock markets made a vigorous recovery in
year’s high level.
the second half of the year and increased expecta-
The positive economic development in Eastern
tions of an economic upturn by rising in some cases
Europe was also reflected by an increase in first-time
quite considerably.
registrations of 6.4 percent, to around 2.2 million
The economy in North America was already show-
passenger cars.
ing signs of a recovery in the second quarter. In the
The market for new vehicles in the USA once
USA, both the aggressive low-interest policy of recent
again shrank. The figure of 7.6 million passenger cars
years and the agenda of extensive tax cuts and sub-
registered as new was around 6.1 percent down on
sidies have stimulated private consumption.
the prior-year total. Despite the slight drop in sales of
In Western Europe, any progress was at best faltering in the first six months of the year. Initial positive
2.0 percent, German manufacturers were able to increase their market share to 10.5 percent.
signs emerged in the second half of the year in West-
Brazil, the largest car market in Latin America,
ern Europe, stimulated by the gradual recovery of the
experienced a downturn of 3.6 percent last year.
global economy. After more than three years of stag-
Argentina was an exception in this region: following a
nation, the German economy likewise exhibited the
sharp slump in sales in previous years, registrations
first signs of a revival towards the end of last year.
of new cars virtually doubled last year.
According to the Ifo business barometer of December
Car sales in the Asia-Pacific region once again
2003, the companies surveyed predicted that the
benefited from growth in China. With new car sales
domestic economy will pick up in the next six months.
totalling 10.0 million units, 11.1 percent more new
Positive developments were fuelled above all by for-
vehicles were sold in the Asia-Pacific region than in
eign demand. Eastern European countries, principally
the previous year. First-time registrations in Japan
those about to accede to the EU, once again demon-
remained at the previous year’s level.
strated the stability of their general economic development. In Latin America, the economy further deteriorated
Development of major car markets First-time registrations
somewhat last year. The trend towards economic stabilisation was undermined above all by protracted
Million vehicles
high unemployment and the political instability of
USA 1
certain countries.
Western Europe
Although the Asian economy was held back until mid-way through the year by the rapid spread of the respiratory disease SARS, the economy in most countries recovered in the second half of the year. China was once again the driving force behind growth in the Asian region in 2003.
Germany 1
excluding SUV
2003
2002
7.6
8.1
14.2
14.4
3.2
3.3
The German car market
Production of the new Audi A3 in particular lay behind
The German car market fell marginally short of the
the rise in production output by the Ingolstadt plant
previous year’s performance, with 3.2 million cars
to 476,964 (435,718) vehicles. As well as the Audi A3,
registered as new in 2003.
the Audi A4 saloon and the Audi A4 Avant are built at
Whereas demand for foreign models rose by
Ingolstadt. 220,023 (225,442) of the Audi A2, Audi A6,
3.8 percent to 1.1 million vehicles mainly thanks to
Audi RS 6, Audi allroad quattro and Audi A8 left the
the much broader range of diesel models on the
production lines in Neckarsulm.
market, demand for German-built cars was down.
The Hungarian subsidiary AUDI HUNGARIA
The diesel share of newly registered cars rose by a
MOTOR Kft. produced a total of 33,953 (53,606) vehi-
further 1.9 percentage points last year, to 39.9 per-
cles. As well as completing 32,337 (34,711) of the
cent.
Audi TT Coupé and Audi TT Roadster, 1,616 (18,895) of
Domestic passenger-car production was at the
the previous Audi A3 model were assembled in Györ.
previous year’s level of 5.1 million vehicles.
Wilhelm Karmann GmbH in Rheine manufactured a total of 29,285 (20,705) of the Audi A4 Cabriolet on behalf of AUDI AG during the year under review. Around one quarter of all Audi vehicles were
Situation of the company
equipped with quattro permanent four-wheel drive (187,908 vehicles).
Good production performance
The proportion of diesel-engined vehicles was only
In spite of the tight situation in the car sector, the Audi Group yet again boosted passenger-car produc-
slightly down on the previous year’s level; the figure
tion in the year under review by 3.5 percent to 760,225
of 46.0 (46.3) percent reflects the overwhelming
(735,471) Audi vehicles and 1,357 (442) Lamborghini
success of Audi diesel technology. Automobili Lamborghini S.p.A. introduced a sec-
vehicles. High demand for the A6 in the Chinese market meant that production of completely knocked
ond car line, the Gallardo, alongside the Murciélago
down (CKD) Audi vehicles enjoyed the highest year-
that has been on the market since 2002. Overall
on-year percentage growth, rising by 76.8 percent to
production rose to 1,357 vehicles, including 933 of
55,584 (31,440) units.
the Gallardo.
Production of vehicles
4.5 percent in the past financial year, to 1,342,883
Engine production within the Audi Group was up (1,284,488) units. 2003
2002
Audi A2
27,323
37,578
Audi A3
151,117
115,051
Audi A4
327,463
339,562
29,285
20,705
148,477
154,872
Audi A4 Cabriolet Audi A6 Audi RS 6
4,841
2,052
Audi allroad quattro
17,634
19,998
Audi A8
21,748
10,942
Audi TT Coupé
20,807
21,488
Audi TT Roadster
11,530
13,223
Total, Audi brand
760,225
735,471
424
442
Lamborghini Murciélago Lamborghini Gallardo Total, Lamborghini brand Total, Group
933
–
1,357
442
761,582
735,913
Diesel share of Audi engine production %
2000
2001
2002
2003
40.1
44.2
46.3
46.0
50 40 30 20
|
50 51
The largest engine manufacturer within the
Model launches and vehicle studies in 2003
Audi Group, AUDI HUNGARIA MOTOR Kft., built a total
The sporty S4 saloon and S4 Avant versions of the A4
of 1,334,985 (1,280,067) four-, six- and eight-cylinder
car line were launched in April 2003. Both models
engines. Engine production by COSWORTH
are powered by a high-torque V8 engine developing
TECHNOLOGY LIMITED was stepped up substantially
253 kW (344 bhp). The Audi allroad quattro has been
to 6,541 (3,979) engines, in particular as a result of
available with a 4.2-litre V8 engine since the second
high demand for RS 6 engines.
quarter of the year.
Further slight rise in vehicle sales
of the mainstays of the Audi Group’s sales volume,
Despite recessive car markets, the Audi Group posted
followed in May. Shortly afterwards, the Audi A8
an increase in vehicle sales for the tenth year in suc-
became available with long wheelbase, as well as a
cession. A total of 1,003,791 (995,531) vehicles were
4.0-litre V8 TDI engine. An attractive 3.2-litre V6 engine
sold. Sales of Audi brand models flourished, rising by
version of the Audi TT with optional Direct Shift
3.7 percent to 769,893 (742,128) entirely against the
Gearbox DSG for both the Coupé and the Roadster
general trend.
has been on the market since August. An even more
The launch of the new three-door Audi A3, one
dynamic version of the Audi A2 featuring a new diesel engine with an output of 66 kW (90 bhp) has been
Vehicle sales
available since November. Interesting studies providing a glimpse of the
2003
2002
Audi A2
28,547
40,142
Audi A3
151,536
126,665
Audi A4
328,727
339,153
The “Audi Pikes Peak quattro” study was exhibited
32,079
13,174
at the Detroit Auto Show at the start of the year. This
153,405
156,039
blend of a saloon, estate car and sporty all-terrain
4,841
2,052
vehicle will go into series production at the end of
Audi A4 Cabriolet Audi A6 Audi RS 6
Audi brand’s sporting ambitions were once again presented to the public in 2003.
Audi allroad quattro
18,621
18,944
2005. A short time later, Audi presented its vision of
Audi A8
19,621
10,204
an elegant, high-performance Gran Turismo in the
Audi TT Coupé
20,218
21,845
guise of the “Audi Nuvolari quattro” concept study at
Audi TT Roadster
12,298
13,910
the Geneva Motor Show. A further highlight, the
Total, Audi brand
769,893
742,128
415
424
Lamborghini Murciélago Lamborghini Gallardo Total, Lamborghini brand
“Audi Le Mans quattro”, made its public debut at the Frankfurt Motor Show in September; this is a super sports car with a five-litre, V10 FSI biturbo engine
890
–
1,305
424
232,593
252,979
Annual average number of employees
1,003,791
995,531
The growth of the Audi Group in the past financial
developing 449 kW (610 bhp).
Other Volkswagen Group brands Total, Group
year was accompanied by a rise in the average number of employees throughout the year by 1,491 The Italian subsidiary AUTOGERMA S.p.A. sold 232,593 (252,979) vehicles of the SEAT, Škoda, Volkswagen
employees, to 52,689. AUDI AG employed 44,728 (44,260) persons. The
Passenger Car and Volkswagen Commercial Vehicle
breakdown of the employee total for the individual
brands. Sales by the Italian sports car manufacturer
plants and subsidiaries of the Audi Group is indicated
Lamborghini rose sharply to 1,305 (424) vehicles.
in the table. The importers in Japan and Australia were fully consolidated for the first time in 2003. Audi Japan K.K. employed 58 persons. The average employee total at Audi Australia Pty. Ltd. was 37.
Management Report of the Audi Group
Investments
Employees within the Audi Group (annual average)
AUDI HUNGARIA MOTOR Kft.
2003
2002
Ingolstadt plant
31,087
30,628
AUDI HUNGARIA MOTOR Kft., based in Györ, Hungary,
Neckarsulm plant
13,641
13,632
specialises in the development and production of
4,939
4,767
motor vehicle engines and components. Both the
COSWORTH TECHNOLOGY LIMITED
813
786
Audi TT Roadster and the Audi TT Coupé are in addi-
Lamborghini Group
685
567
tion built at the Hungarian plant. Following the launch
AUTOGERMA S.p.A.
712
695
of the current A3 model in May 2003, contract produc-
Other
812
123
tion of the previous Audi A3 model was halted. All A3
AUDI HUNGARIA MOTOR Kft.
and S3 models have since been built at the Ingolstadt plant. In the area of engine production, volume proResearch and development
duction of the new 4.0-litre V8 TDI engine used in the
Research and development spending by the Audi
Audi A8 commenced during the past financial year.
Group totalled EUR 1,257 (1,335) million in the 2003
The two-litre pump-injector version with an output of
financial year. An amount of EUR 636 (834) million
103 kW (140 bhp) was in addition added to the pro-
of this total was capitalised. Including depreciation
duction range of four-cylinder TDI engines.
of capitalised development costs amounting to EUR 476 million, research and development costs
COSWORTH TECHNOLOGY LIMITED
amounted to EUR 1,096 (900) million.
Cosworth Technology has three divisions at three locations in Great Britain and one in the USA. The
Changes in company management
headquarters at Northampton provide all services
With effect from January 1, 2003, Rupert Stadler was
associated with the development of engines. High-
appointed to the Board of Management, initially as
performance engines are manufactured and engine
member without portfolio. He took charge of the
components machined at Wellingborough. The
“Finance and Organisation” Division with effect from
foundry in Worcester specialises in the production of
April 1, 2003. He took over in this capacity from Peter
high-grade aluminium engine components.
Abele, who retired on March 31, 2003. Dr. Werner Mischke was appointed Chairman of
Cosworth Technology, Inc. based in Novi, USA, supplies modern vehicle information and diagnostic
the Board of Directors of Automobili Lamborghini
systems as well as the classic engine development
S.p.A. and Chairman of the Advisory Board of quattro
services.
GmbH with effect from January 1, 2003. Dr. Mischke left the Board of Management of AUDI AG with effect
Lamborghini Group
from April 30, 2003.
As well as the sports car manufacturer Automobili
Ralph Weyler was appointed to succeed Dr. Georg
Lamborghini S.p.A., the Lamborghini Group, consoli-
Flandorfer as Board Member with responsibility
dated under Automobili Lamborghini Holding S.p.A.,
for “Marketing and Sales” with effect from October 1,
includes the power boat engines manufacturer
2003. Dr. Flandorfer has assumed new duties within
Motori Marini Lamborghini S.p.A. and Lamborghini
Volkswagen AG.
ArtiMarca S.p.A., which sells Lamborghini accessories and exclusive merchandise. In addition to building the Lamborghini Murciélago, production of the new Lamborghini Gallardo commenced at Automobili Lamborghini S.p.A. during the past financial year.
|
52 53
AUTOGERMA S.p.A.
FAW-Volkswagen Automotive Company, Ltd.
AUTOGERMA S.p.A., a fully owned subsidiary of
and YANASE Audi Sales Company Ltd. have been
Automobili Lamborghini Holding S.p.A. based in
consolidated at equity since 2003. As a successful
Verona, Italy, is the general importer of vehicles of the
premium-standard supplier to the Chinese market,
Audi, SEAT, Škoda, Volkswagen Commercial Vehicle
FAW-Volkswagen Automotive has been the local
and Volkswagen Passenger Car brands. Against the
manufacturer of the A6 since 1999 and the A4
backdrop of a contracting overall market in Italy, sales
since April 2003. YANASE Audi Sales Company was
by Autogerma were likewise down 6.3 percent on the
established in December 2002 as a joint venture of
previous year.
Audi Japan K.K. and Yanase Co. Ltd. with the purpose of selling Audi vehicles and parts in Japan.
quattro GmbH quattro GmbH, of Neckarsulm, complements the
Profit transfer agreements
Audi brand’s range of vehicles by supplying sporty
The Annual General Meeting of AUDI AG ratified profit
high-performance cars. Demand for the Audi RS 6,
transfer agreements with Audi Electronics Venture
which had been launched in 2002, easily outstripped
GmbH, Audi Synko GmbH, Audi Vertriebsbetreuungs-
expectations with sales totalling 4,841 (2,052) units.
gesellschaft mbH, AUTO UNION GmbH and NSU
Both the saloon and Avant versions have a 4.2-litre V8
GmbH on May 14, 2003.
engine developing 331 kW (450 bhp), and combine uncompromising sports appeal with the comfort of the Audi A6 car line. Through its “S line” business
Financial performance
area, quattro GmbH is enjoying considerable success with its wide range of sports packages supplied
Renewed rise in revenue
ex works for virtually all vehicles in the current Audi
In spite of the sluggish recovery in the global econ-
model range. quattro GmbH is responding to
omy, the Audi Group was able to post improved
increasing demand for customised cars via its “Audi
vehicle sales in the 2003 financial year in virtually all
exclusive” equipment range. The company’s portfolio
regions, thus going against the general trend.
of activities is rounded off by an extensive selection
Revenue totalling EUR 23,406 (22,603) million conse-
of exclusive Audi lifestyle accessories.
quently showed an improvement of 3.6 percent on the previous year’s figure.
Newly consolidated companies
Sales of Audi vehicles contributed the lion’s share.
The portfolio of companies consolidated under the
Revenue from the sale of Audi models rose overall
umbrella of the Audi Group once again grew in the
by 2.6 percent to EUR 17,139 (16,706) million, thanks
2003 financial year. In Germany, Audi Synko GmbH, a
in no small measure to the success of the newly
company which has the objective of investing in Audi
launched second-generation A3. The A4 was the
dealerships in strategically important locations, and
model making the largest contribution towards this
Audi Zentrum Hannover GmbH were fully consoli-
total, bringing in EUR 8,043 (8,055) million or 46.9
dated. Audi Vertriebsbetreuungsgesellschaft mbH,
percent of total revenue. Revenue for the A6 models
which is likewise fully consolidated, concentrates on
eased off compared with the previous year to
providing support, consultancy and training for the
EUR 4,102 (4,759) million, substantially due to the
retail companies in the Audi sales organisation in
forthcoming model changeover. Sales of the Audi A3
Germany, including all dealer, sales, service and mar-
and Audi TT generated revenue of EUR 3,416 (2,811)
keting functions.
million. Sales of the current A8 model series made
In the Asia-Pacific region, Audi Japan K.K., a company which has the responsibility of managing sales operations in Japan, and Audi Australia Pty. Ltd., the Australian importer for Audi vehicles and parts, are now also fully consolidated.
particularly good progress, generating revenue of EUR 1,190 (545) million.
Management Report of the Audi Group
The rise in distribution costs to EUR 1,458 (1,377)
Revenue by model line
million and the higher general administrative costs EUR million
of EUR 246 (203) million are mainly attributable to the
2003
2002
388
536
Audi A3/TT
3,416
2,811
Audi A4/A4 Cabriolet
8,043
8,055
than the previous year and reached EUR 555 (188)
Audi A6/allroad quattro/RS 6
4,102
4,759
million.
Audi A8
1,190
545
Audi A2
first-time consolidation of sales subsidiaries. The other operating result was significantly higher
The operating result fell to EUR 1,058 (1,336) million.
7.0%
2.3%
The finance result showed a significant improvement in the past financial year, to EUR 50 (– 82) million. This is substantially the outcome of the rise
23.9%
19.9%
in the investment result to EUR 72 (42) million and the improvement in the interest result to EUR 91 (– 20) million. The other financial result moved slightly in
46.9%
the opposite direction, to EUR – 113 (– 103) million. The Audi Group posted a pre-tax profit of EUR 1,108 (1,254) million. This figure was considerably affected by the changes in the value of the US dollar and the pound sterling, the negative impact
The cost of sales was up 6.7 percent on the previous
of which could not be entirely balanced out by the
year to EUR 21,199 (19,875) million. This dispropor-
higher unit sales and the successful implementation
tionately high increase in relation to the development
of cost-cutting schemes and process improvements.
in revenue is in essence attributable to exchange rate shifts that have diminished revenue, and to the rise
Key earnings data
in depreciation of capitalised development costs and property, plant and equipment. Rate of return before tax
2003
2002
4.7%
5.6%
Development of profit before tax and
Rate of return after tax
3.5%
3.4%
rate of return before tax
Equity return after tax
15.4%
16.7%
1.6
1.8
Capital turnover 2000
2001
2002
2003
1,200
The rate of return before tax for 2003 was 4.7 percent, as against 5.6 percent in the previous year.
900
The profit before tax however increased from EUR 774 million to EUR 816 million. This is primarily
600
due to the fact that deferred tax assets resulting from 300
tax relief on capital investments by AUDI HUNGARIA MOTOR Kft. were recognised for the first time.
0
Within the scope of the effective control and profit Profit before tax (EUR million)
transfer agreement, AUDI AG transferred an amount 986
1,322
1,254
1,108
4.9
6.0
5.6
4.7
Rate of return before tax (%)
of EUR 160 (185) million to Volkswagen AG. After deducting the profit share of other shareholders, the remaining surplus of EUR 653 (587) million was transferred to the other revenue reserves.
After deduction of the cost of sales from revenue, the gross operating profit was consequently down 19.1 percent to EUR 2,206 (2,728) million.
|
54 55
Added value 2003
2002
2003
2002
EUR million
EUR million
%
%
23,406
22,603
Revenue + Other income
1,245
684
– Expenditures
20,359
19,264
4,292
4,023
100.0
100.0
2,938
2,739
68.5
68.1
Added value Distribution Employees Creditors (interest)
43
52
1.0
1.3
State
495
457
11.5
11.3
Transfer of profits to Volkswagen AG
160
185
3.7
4.6
Profit share of minority shareholders
3
3
0.1
0.1
653
587
15.2
14.6
Transfer to revenue reserves
Net worth and financial position Development of balance sheet
Capital investments by the Audi Group
The balance sheet total for 2003 rose by 11.2 percent to EUR 14,213 (12,787) million. On the assets side,
EUR million
2000
2001
2002
2003
2,422
2,151
2,410
2,094
2,094
2,452
2,503
2,925
investing activities boosted fixed assets by 2.8 percent to EUR 8,471 (8,238) million. Fixed assets thus represented 59.6 (64.4) percent of total assets. Capital
2,500 2,000
investments by the Audi Group consequently totalled EUR 2,094 (2,410) million in the year under review.
1,500
Of this total, EUR 1,382 (1,516) million were invested in property, plant and equipment and related in the main to the A3, A6 and A8 model series. Property,
1,000 500
plant and equipment consequently rose slightly to EUR 5,512 (5,480) million. The increase in intangible assets to EUR 2,678 (2,534) million is attributable among other things to the capitalisation of development costs totalling EUR 636 (834) million. Current assets for the Audi Group rose to EUR 5,742 (4,548) million in the year under review.
0 Capital investments Cash flow from operating activities
Inventories accounted for an amount of EUR 1,814 (1,711) million of this total. Receivables and liquid assets were 36.4 percent up on the previous year, at
million to the other revenue reserves. The equity
EUR 3,685 (2,701) million.
ratio rose to 39.8 (38.6) percent. Borrowings rose to
On the equity and liabilities side, shareholders’
EUR 8,555 (7,847) million mainly as a result of trans-
equity rose to EUR 5,658 (4,940) million following the
fers to the provisions for warranty claims, the pre-
allocation of the remaining surplus for the year, after
retirement part-time scheme and pensions. Liabilities
the transfer of profit and the deduction of the profit
amounted to EUR 3,785 (3,371) million. This produced
share of other shareholders, totalling EUR 653 (587)
a borrowing capital ratio of 60.2 (61.4) percent.
Management Report of the Audi Group
Balance sheet structure EUR million
2000
Assets 2001
2002
2003
Equity and liabilities 2003
2002
2001
2000
5,658 4,940
8,471 Fixed assets
4,342
8,238
Equity 3,817
1,565
7,624
Long-term borrowings
1,355
6,988 1,307
1,138 1,814
1,435
1,274
961
831
3,792
3,891
Medium-term borrowings
1,711
Inventories
4,987
1,463
4,566
Receivables and liquid assets
1,450
Deferred tax assets
1,801
2,047
129
122
137
243
696
788
726
555
10,368
11,256
12,787
14,213
14,213
12,787
11,256
10,368
3,685
Short-term borrowings
2,701 Deferred tax liabilities
Healthy financial position In the past financial year, the Audi Group boosted cash flow from operating activities by a further 16.9 percent to EUR 2,925 (2,503) million. As in previous years, it was thus able to finance the entire volume of investment of EUR 2,062 (2,373) million from operating activities. Demand-based steering of investment enabled us to implement our investment plans in full and to the customary standard of quality. Net cash flow, i.e. cash flow from operating activities less investing activities, was significantly up on the previous year at EUR 863 (130) million. Net liquidity was thus augmented by 74.0 percent to EUR 1,526 (877) million. Cash flow EUR million
2003
2002
Cash flow from operating activities
2,925
2,503
Investing activities
2,062
2,373
863
130
1,526
877
Net cash flow Net liquidity
|
56 57
Risk report
Price, foreign currency and liquidity risks As a result of its international business activities, the
Risk management within the Audi Group
Audi Group is exposed to risks from developments
To ensure that risks which could pose a threat to the
on international foreign exchange markets. These
company’s survival are identified at an early stage,
developments principally affect payments in foreign
companies are obliged by German corporate gover-
currency as a result of its operations, in other words
nance legislation (KonTraG) to implement a risk
predominantly for goods and services. Opportunities
management system.
and risks are actively steered by intensively observing
AUDI AG uses a risk management system that
the market and implementing appropriate hedging
takes into account the risks of all corporate divisions
instruments. Derivative financial instruments con-
and all major subsidiaries of the group. The risk early
cluded via Volkswagen AG with national and interna-
warning system permits the prompt identification of
tional banks of top-grade creditworthiness are
potential risks to the net worth, financial position and
employed for hedging purposes.
financial performance of the company. Clear spheres
A regularly updated liquidity projection with a
of responsibility as well as reporting and recording
daily, weekly and monthly horizon is drawn up in
obligations are laid down for all corporate divisions
order to steer the liquidity risk.
and subsidiaries. First, the magnitude of a loss and the probability of a risk materialising are assessed for
Legal risks
each individual risk. The magnitude of losses from
The consequences of the material prohibitions which
serious risks is then quantified. The functioning of the
came into force in the EU on July 1, 2003 remain
risk management system is checked regularly and its
unclear as development cost risks from the substitu-
efficiency continually refined.
tion of heavy metals in the current implementation phase which runs until 2007/2008 cannot be excluded.
Risks from worldwide economic developments The anticipated recovery of the global economy in
Operating risks
2004 is accompanied by uncertainty in a great many
The Audi Group has taken out appropriate insurance
areas. Continuing political conflicts in the Near and
cover to guard against financial risks from the inter-
Middle East could destabilise the nascent worldwide
ruption of production operations. The Audi Group
recovery. A strong euro represents a risk for export-
is able to respond to fluctuations in demand by
oriented companies in eurozone countries.
adjusting production swiftly and economically with the aid of flexible working-hours models.
Risks from the development of the car market
The close, economically advantageous collabora-
The car market will again progress at various speeds
tion between car manufacturers and suppliers that is
in individual regions in 2004. Despite positive signals
customary in this industry and the related short-term
from the US car market, American manufacturers
dependency on the supplier increases the risk of
in particular could continue to resort to special sales
production hitches as a result of non-delivery, delivery
measures to underpin sales in 2004. The pricing pres-
delays or quality defects. Audi uses comprehensive
sure is likewise growing on the Western European
supplier selection, steering and monitoring tech-
car market. As a premium brand, Audi has until now
niques to limit these risks and the associated loss of
remained largely immune to this development, and
income.
will continue to give priority to qualitative growth
Vehicle sales are exposed to risks stemming both
and improving profitability within the context of the
from the general state of the economy and from
Audi brand strategy.
the political environment. There exist further risks in the form of the increasing use of sales promotion measures within the car industry. To limit the aforementioned risks, the Audi Group uses extensive market and competitor analyses in order to predict customer behaviour in the individual regions and steer it accordingly.
Management Report of the Audi Group
Overall situation of the company
Outlook for the car market
On the basis of all particulars and circumstances
Worldwide car sales should increase again slightly in
known to us, there are currently no risks to the Audi
2004. Demand for cars will grow at its most dynamic
Group which would have such a significant effect
rate in the Asia-Pacific region, above all in China.
on its net worth, financial position and financial per-
Whereas a slight recovery in the car market is
formance that they could endanger the Audi Group’s
expected in North America, in Western Europe sales
survival for the foreseeable future.
are likely to stagnate at the previous year’s level.
Events occurring after the balance sheet date
in the second half of the year. The appearance of a
No events of particular significance which must be
large number of new models and the high average
reported according to IAS 10 occurred after
age of the vehicle population, leading to substantial
December 31, 2003.
replacement demand, should provide a significant
In Germany, vehicle sales are expected to pick up
stimulus. We predict that German car manufacturers will Outlook
enjoy an upswing in production, prompted above all by the anticipated rise in export demand. Audi
Economic development
expects its profitability to remain stable.
The gradual recovery in the global economy should continue in 2004, now that the economic situation
New models in 2004
has improved in virtually all regions of the world in
The new 12-cylinder Audi A8 was presented to the
recent months. The USA is providing the initial impe-
public at the Detroit Auto Show in January 2004.
tus. The economic recovery will be underpinned by
This luxury saloon is powered by a 331 kW (450 bhp)
the expansionary monetary policy of recent years and
engine with a displacement of six litres and peak
by fiscal policy. In the first half of the year, private
torque of 580 Nm. The Audi A8 model range will be
consumption in the USA will be fuelled above all by
extended by a new six-cylinder TDI engine in March
tax rebates as a result of last year’s tax reform.
2004.
Economic growth will improve only hesitantly in
The new Audi A6 saloon, which will be appearing
Western Europe in 2004. The unstable situation on the
on the market in the second quarter, will be making
employment market will initially continue to have a
its official debut at the Geneva Motor Show, again
constraining effect on private consumption. Exports
in March 2004. Sales of the Audi S4 Cabriolet started
will be the main source of positive stimulus. The pro-
in January 2004. The first models will be delivered to
tracted weakness of the US dollar must nevertheless
customers in March 2004.
be rated as a risk. If its value against the euro con-
The sports car manufacturer Automobili
tinues to deteriorate, it will undermine exports and
Lamborghini S.p.A. will be taking the wraps off the
endanger the entire economic recovery.
Lamborghini Murciélago Barchetta at the Geneva
In Germany, it is hoped that private consumption will pick up as a result of the tax reform, thus kick-
Motor Show; this car is due to appear on the market in the fourth quarter of 2004.
starting the economy. The Asian region is once again set to exhibit very
Capital investments
dynamic growth in 2004. The Chinese economy in par-
To preserve the international competitiveness of
ticular is once more likely to act as the driving force in
the Audi Group in the future, an investment volume
the region this year. The expected recovery of the
of some EUR 12.4 billion is scheduled for the period
emerging markets in Southeast Asia will lend added
from 2004 to 2008. More than 70 percent of this sum
impetus to the economy of the entire region.
will be spent on new products. Over 80 percent will be spent on the German sites in Ingolstadt and Neckarsulm. Investing activities are to be financed from cash flow from operating activities. Capital investments over the entire planning period amount to around eight percent of forecast revenue.
|
58 59
Independent Auditor’s Report
This report was originally prepared in German. In case of ambiguities the German version shall prevail:
In our opinion, the consolidated financial statements give a true and fair view of the net assets, financial position, results of operations and cash flows of the Group for the business year 2003 in
Independent Auditor’s Report
accordance with IFRS.
We have audited the consolidated financial state-
agement report prepared by the Board of Manage-
ments of AUDI AG, Ingolstadt, consisting of the bal-
ment for the business year from January 1 to Decem-
ance sheet, the income statement and the statement
ber 31, 2003, has not led to any reservations. In our
of changes in equity and cash flows as well as the
opinion, on the whole the group management report
notes to the consolidated financial statements for the
together with the other information of the consoli-
business year from January 1 to December 31, 2003.
dated financial statements provides a suitable under-
The preparation and the content of the consolidated
standing of the Group´s position and suitably pre-
financial statements according to the International
sents the risks of future development. In addition, we
Financial Reporting Standards of the IASB (IFRS) are
confirm that the consolidated financial statements
the responsibility of the Company’s Board of Manage-
and the group management report for the business
ment. Our responsibility is to express an opinion,
year from January 1 to December 31, 2003 satisfy
based on our audit, whether the consolidated finan-
the conditions required for the Company´s exemption
cial statements are in accordance with IFRS.
from its duty to prepare consolidated financial
Our audit, which also extends to the group man-
We conducted our audit of the consolidated financial statements in accordance with German auditing
statements and the group management report in accordance with German accounting law.
regulations and generally accepted standards for the audit of financial statements promulgated by the Institut der Wirtschaftsprüfer in Deutschland e.V.
Hanover, February 4, 2004
(IDW). Those standards require that we plan and perform the audit to obtain reasonable assurance about
PwC Deutsche Revision
whether the consolidated financial statements are
Aktiengesellschaft
free of material misstatements. Knowledge of the
Wirtschaftsprüfungsgesellschaft
business activities and the economic and legal environment of the Group and evaluations of possible
Gadesmann
ppa. Schröder
misstatements are taken into account in the determi-
Wirtschaftsprüfer
Wirtschaftsprüfer
nation of audit procedures. The evidence supporting the amounts and disclosures in the consolidated financial statements are examined on a test basis within the framework of the audit. The audit includes assessing the accounting principles used and significant estimates made by the Board of Management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion.
Consolidated Financial Statements of the Audi Group at December 31, 2003
Declaration of the Board of Management
PwC Deutsche Revision Aktiengesellschaft Wirtschaftsprüfungsgesellschaft, Hanover, has exam-
The Board of Management of AUDI AG is responsible
ined the consolidated financial statements and group
for the preparation of the consolidated financial state-
management report in its capacity as independent
ments and group management report. Reporting is
auditor, in accordance with the resolution of the
performed on the basis of the International Financial
Annual General Meeting, and issued its unqualified
Reporting Standards (IFRS) and the interpretations of
certification as shown at the end of the Notes.
the International Financial Reporting Interpretations
The consolidated financial statements, the group
Committee (IFRIC), as well as of the predecessor
management report, the audit report and the mea-
organisation, the Standing Interpretations Committee
sures to be taken by the Board of Management for
(SIC). The group management report is prepared in
the prompt identification of risks which could pose
accordance with the requirements of the German
a threat to the company’s survival were discussed
Commercial Code. The conditions of Section 292a of
at length by the Supervisory Board in the presence
German Commercial Code for exemption from the
of the auditors. The findings of this examination are
obligation to prepare consolidated financial state-
indicated in the Report of the Supervisory Board.
ments in accordance with German accounting standards are met. The assessment of these conditions is based on German Accounting Standard No. 1 (DRS 1), published by the German Council for Standardisation. The regularity of the consolidated financial statements and group management report is assured by means of internal controlling systems, the implementation of uniform guidelines throughout the group, and employee training and advancement measures. Compliance with the legal requirements and with internal group guidelines, as well as the reliability and functioning of the systems of controlling, are checked on an ongoing basis throughout the group. The early warning function required by law is achieved by means of a group-wide risk management system that enables the Board of Management to identify potential risks at an early stage and initiate corrective action as necessary.
|
60 61
Income statement of the Audi Group for the 2003 financial year
EUR ‘000
Notes
2003
2002
Revenue
1
23,405,551
22,602,643
Cost of sales
2
21,199,083
19,874,905
2,206,468
2,727,738 1,376,884
Gross profit Distribution costs
3
1,457,893
General administrative costs
4
245,746
203,167
Other operating income
5
840,867
639,539
Other operating expenses
6
Operating result
285,689
451,222
1,058,007
1,336,004
Result for holdings valued at equity
7
+ 53,504
0
Other investment result
7
+ 18,422
+ 42,373
Net interest
8
+ 91,195
– 20,403
Other financial results
9
– 112,828
– 103,475
Financial result
+ 50,293
– 81,505
Profit before tax
1,108,300
1,254,499
Income tax expense
10
Net profit Profit share of minority shareholders
11
Consolidated net profit for the year Profit transfer to Volkswagen AG
12
Transfer to revenue reserves
EUR
292,515
480,142
815,785
774,357
2,699
2,801
813,086
771,556
160,000
185,000
653,086
586,556
Notes
2003
2002
Earnings per share
13
18.91
17.94
Diluted earnings per share
13
18.91
17.94
Consolidated Financial Statements
Balance sheet of the Audi Group at December 31, 2003
ASSETS EUR ‘000
Notes
Dec. 31, 2003
Dec. 31, 2002
Intangible assets
14
2,678,316
2,534,115
Property, plant and equipment
15
5,511,644
5,479,735
Holdings valued at equity
16
103,527
–
Other financial assets
16
167,362
205,096
Rented lessor’s assets
17
Fixed assets
10,066
19,417
8,470,915
8,238,363
Current assets Inventories
18
1,814,073
1,710,501
Trade receivables
19, 20
1,230,812
1,106,364
Other receivables and assets
19, 21
723,577
538,233
Securities
22
508,125
508,663
Cash
23
1,207,519
540,263
5,484,106
4,404,024 137,025
Deferred tax assets
24
243,700
Prepaid expenses
25
14,322
7,412
14,213,043
12,786,824
Notes
Dec. 31, 2003
Dec. 31, 2002
Issued capital
26
110,080
110,080
Capital reserves
27
56,730
56,730
Revenue reserves
28
5,491,476
4,773,105
5,658,286
4,939,915
Minority interests
29
11,474
6,027
Provisions
30
4,061,342
3,679,593
EQUITY AND LIABILITIES EUR ‘000 Equity
Liabilities
31
Long-term debt
32
17,440
5,703
Short-term debt
32
188,574
165,887
Trade payables
33
2,138,530
1,906,842
Other liabilities
34
1,440,169
1,292,504
3,784,713
3,370,936
Deferred tax liabilities
35
695,767
787,962
Deferred income
36
1,461
2,391
14,213,043
12,786,824
|
62 63
Development of equity
Issued
Capital
capital
reserve
EUR ‘000 Position at Dec. 31, 2001
Revenue reserves
Total
Legal
Currency
and other
exchange
for
revenue
reserve
cash flow
reserves
Reserve
hedges
110,080
56,730
4,169,153
7,412
– 1,048
4,342,327
–
–
– 1,752
– 11,347
–
– 13,099
consolidated companies
–
–
6,167
–
–
6,167
Transfer to revenue reserves
–
–
586,556
–
–
586,556
–
–
–
–
48,408
48,408
Currency adjustments Differences from changes in
Changes in value not affecting income Result from settled cash flow hedges Position at Dec. 31, 2002 Currency adjustments
–
–
–
–
– 30,444
– 30,444
110,080
56,730
4,760,124
– 3,935
16,916
4,939,915
–
–
– 2,264
– 28,139
–
– 30,403
Differences from changes in consolidated companies
–
–
75,376
–
–
75,376
Transfer to revenue reserves
–
–
653,086
–
–
653,086
–
–
–
–
64,421
64,421
Changes in value not affecting income Result from settled cash flow hedges Position at Dec. 31, 2003
–
–
–
–
– 44,109
– 44,109
110,080
56,730
5,486,322
– 32,074
37,228
5,658,286
Equity is explained in further detail under items 26, 27 and 28 in the Notes. The differences from changes to the consolidated companies result in the main from the first-time inclusion at equity of FAW-Volkswagen
The item Tax payments comprises payments made to Volkswagen AG on the basis of the single-entity relationship in Germany, and payments to foreign tax authorities. The change in cash as a result of changes to the
Automotive Company, Ltd., Changchun, and the
group relates to companies that are consolidated for
first-time consolidation in full of Audi Japan K.K.,
the first time and were carried on the cost of pur-
Tokyo.
chase basis in previous years.
Cash flow statement of the Audi Group from
plant and equipment and to capitalised development
January 1 to December 31, 2003
costs. The change in rented lessor’s assets and
Cash and cash equivalents in the cash flow statement
the income from asset disposals are likewise reported
comprise exclusively the cash as reported in the
here.
Investing activities include additions to property,
balance sheet. The cash flow statement explains the streams of payments for both the 2003 financial year and the previous year, categorised according to cash inflows
Financing activities include cash outflows from the transfer of profit and from distributions, as well as changes in other borrowings. Liabilites from factoring are reported under short-
and outflows from current business operations,
term debt for the first time in the 2003 financial year.
from investing activities and from financing activities.
The change in factoring liabilities is now allocated to
Effects of changes to the group and to foreign
financing activities accordingly. To permit greater
exchange rates on payments are shown separately.
comparability, the prior-year figures in the cash flow statement and balance sheet have been adjusted.
Consolidated Financial Statements
Cash flow statement of the Audi Group from January 1 to December 31, 2003
EUR ‘000
2003
2002
Net profit before transfer and taxation
1,108,300
1,254,499
Tax payments
– 354,907
– 316,680
475,714
331,484
1,395,323
1,308,648
Depreciation on capitalised development costs Depreciation on property, plant and equipment and on intangible assets Depreciation on financial assets
306
–
Depreciation on rented lessor’s assets
146
494
319,644
279,997
Result from asset disposals
27,165
134,744
Result from valuation at equity
– 7,735
–
Other non-cash expenses/income
– 6,851
36,952
Change in inventories
– 8,174
– 241,775
Change in receivables
– 298,205
– 758,791
273,903
472,958
Cash flow from operating activities
2,924,629
2,502,530
Additions for development costs recognised as assets
– 636,084
– 833,711
– 1,438,020
– 1,555,959
– 13,771
– 6,239
Investments in other financial assets
– 1,958
– 395
Investments in rented lessor’s assets
– 2,402
–1
Income from asset disposals
30,213
23,502
– 2,062,022
– 2,372,803
862,607
129,727
Change in other provisions (excluding tax provisions)
Change in liabilities
Investments in property, plant and equipment and in intangible assets Acquisition of affiliated companies and investments
Investing activities Net cash flow Change in marketable securities Investing activities including investments in securities
26,619
155,046
– 2,035,403
– 2,217,757
Transfer and distribution of profits (of which to Volkswagen AG: EUR 185 million (previous year: EUR 209 million))
– 188,065
– 213,846
Change in debt
– 63,448
17,260
Lease payments
– 4,475
– 15,250
Change in loans to group companies Financing activities Change in cash and cash equivalents from changes to the group Change in cash and cash equivalents from exchange-rate changes
0
– 61
– 255,988
– 211,897
31,186
7,887
2,832
– 2,640
Change in cash and cash equivalents
667,256
78,123
Cash and cash equivalents at start of period
540,263
462,140
Cash and cash equivalents at end of period
1,207,519
540,263
Cash and cash equivalents
1,207,519
540,263
Securities and loans
524,328
508,665
1,731,847
1,048,928
Total third-party borrowings
– 206,013
– 171,590
Net liquidity
1,525,834
877,338
Gross liquidity
|
64 65
Notes to the consolidated financial statements of the Audi Group for the 2003 financial year Fixed assets for the 2003 financial year Gross carrying values Cost of
Changes
Foreign
Additions
purchase/
in con-
currency
from
from
cost of
solidated
changes
valuation
valuation
at equity
at equity
sales companies EUR ‘000
Additions
Transfers
Disposals
Disposals
Jan. 1, 2003
Intangible assets Concessions, industrial property rights and similar rights and values, as well as licences thereto
116,110
610
– 115
54,780
–
8,505
13,756
–
Goodwill
365,874
2,856
–
1,851
–
–
–
–
907,800
–
–
501,672
–
– 404,066
–
–
2,327,272
–
–
134,412
–
404,066
255,149
–
Capitalised development costs, products currently in development Capitalised development costs, products currently in use Payments on account for intangible assets
7,790
–
–
1,196
–
– 7,040
–
–
3,724,846
3,466
– 115
693,911
–
1,465
268,905
–
buildings
2,851,292
23,184
– 3,755
92,711
–
134,234
19,520
–
Plant and machinery
3,440,749
782
– 5,137
178,672
–
204,277
143,143
–
5,997,384
1,759
– 540
634,419
–
208,095
293,858
–
Property, plant and equipment Land, land rights and buildings, including buildings on land owned by others and leased
Other fixtures and fittings, tools and equipment and leased fixtures and fittings, tools and equipments Payments on account and construction in progress
731,471
–
– 421
476,395
–
– 537,407
9,788
–
13,020,896
25,725
– 9,853
1,382,197
–
9,199
466,309
–
163,214
–
– 229
5,110
–
–
30,697
–
–
–
– 20,241
–
123,338
39,555
–
39,125
38,901
4,108
– 140
8,025
–
– 39,555
78
–
–
3,317
–
1,700
–
–
3,317
–
–
15,511
– 702
–
–
–
–
–
Financial assets Shares in affiliated companies Companies valued at equity Investments Loans to affiliated companies Loans to companies valued at equity Loans to companies linked through participation Other loans
Rented lessor’s assets Total fixed assets
3
–
–
–
–
–
3
–
3,094
–
–
258
–
–
731
–
205,212
22,936
– 21,312
15,093
123,338
–
34,826
39,125
21,751
2,159
– 460
2,402
–
– 10,664
–
–
16,972,705
54,286
– 31,740
2,093,603
123,338
–
770,040
39,125
Consolidated Financial Statements
Allowances Cost of
Cumu-
Carrying values Changes
Foreign
Deprecia-
purchase/
lative
in con-
currency
tion for
cost of
deprecia-
solidated
changes
current
sales Dec. 31, 2003
tion companies
Transfers
Disposals
Writeups
Cumulative deprecia-
year
tion
Jan. 1, 2003
Dec. 31, 2003 Dec. 31, 2003 Dec. 31, 2002
166,134
54,920
213
– 30
30,133
92
13,746
–
71,582
94,552
61,190
370,581
148,956
1,994
–
46,400
–
–
–
197,350
173,231
216,918
1,005,406
–
–
–
–
–
–
–
–
1,005,406
907,800
2,610,601
986,855
–
–
475,714
–
255,149
–
1,207,420
1,403,181
1,340,417
1,946
–
–
–
–
–
–
–
–
1,946
7,790
4,154,668
1,190,731
2,207
– 30
552,247
92
268,895
–
1,476,352
2,678,316
2,534,115
3,078,146
1,189,849
4,289
– 449
125,587
– 1,965
4,303
–
1,313,008
1,765,138
1,661,443
3,676,200
2,103,068
297
– 2,640
424,458
– 31
133,030
–
2,392,122
1,284,078
1,337,681
6,547,259
4,247,576
865
– 355
768,745
– 76
272,342
–
4,744,413
1,802,846
1,749,808
660,250
668
–
–
–
–
–
–
668
659,582
730,803
13,961,855
7,541,161
5,451
– 3,444
1,318,790
– 2,072
409,675
–
8,450,211
5,511,644
5,479,735
137,398
–
–
–
–
–
–
–
–
137,398
163,214
103,527
–
–
–
–
–
–
–
–
103,527
–
11,261
–
80
3
–
–
78
–
5
11,256
38,901
1,700
–
2,200
–
306
–
2,200
–
306
1,394
–
14,809
–
–
–
–
–
–
–
–
14,809
–
–
–
–
–
–
–
–
–
–
–
3
2,621
116
–
–
–
–
–
–
116
2,505
2,978
271,316
116
2,280
3
306
–
2,278
–
427
270,889
205,096
15,188
2,334
930
– 268
146
1,980
–
–
5,122
10,066
19,417
18,403,027
8,734,342
10,868
– 3,739
1,871,489
–
680,848
–
9,932,112
8,470,915
8,238,363
|
66 67
Fixed assets for the 2002 financial year Gross carrying values Cost of
EUR ‘000
Changes
Foreign
Additions
Transfers
Disposals
Cost of
purchase/
in con-
currency
purchase/
cost of
solidated
changes
cost of
sales
companies
sales
Jan. 1, 2003
Dec. 31, 2003
Intangible assets Concessions, industrial property rights and similar rights and values, as well as licences thereto Goodwill
72,742
15
– 13
45,977
2,408
5,019
116,110
365,874
–
–
–
–
–
365,874
823,394
16,930
–
579,323
– 444,799
67,048
907,800
1,648,434
–
–
254,388
444,799
20,349
2,327,272
Capitalised development costs, products currently in development Capitalised development costs, products currently in use Payments on account for intangible assets
–
–
–
7,790
–
–
7,790
2,910,444
16,945
– 13
887,478
2,408
92,416
3,724,846
by others and leased buildings
2,676,348
–
– 1,960
97,940
126,366
47,402
2,851,292
Plant and machinery
3,329,656
181
– 4,387
188,631
171,556
244,888
3,440,749
5,287,773
1,154
– 1,598
687,152
286,243
263,340
5,997,384
Property, plant and equipment Land, land rights and buildings, including buildings on land owned
Other fixtures and fittings, tools and equipment and leased fixtures and fittings, tools and equipment Payments on account and construction in progress
812,543
–
–208
541,878
– 591,524
31,218
731,471
12,106,320
1,335
– 8,153
1,515,601
– 7,359
586,848
13,020,896
164,343
–
– 204
6,239
–
7,164
163,214
39,053
–
–
–
–
152
38,901
Financial assets Shares in affiliated companies Investments Loans to companies linked through participation Other loans
Rented lessor’s assets Total fixed assets
11
–
–
–
–
8
3
3,598
–
–
395
–
899
3,094
207,005
–
–204
6,634
–
8,223
205,212
16,927
–
–
1
4,951
128
21,751
15,240,696
18,280
– 8,370
2,409,714
–
687,615
16,972,705
Consolidated Financial Statements
Allowances Cumulative
Carrying values Changes
Foreign
Deprecia-
deprecia-
in con-
currency
tion for
deprecia-
tion
solidated
changes
current
tion
companies
Transfers
Disposals
Write-ups
Cumulative
year
Jan. 1, 2003
Dec. 31, 2003
Dec. 31, 2003
Dec. 31, 2002
35,013
–
–
24,914
–
5,007
–
54,920
61,190
37,729
104,530
–
–
44,426
–
–
–
148,956
216,918
261,344
–
–
–
–
–
–
–
–
907,800
823,394
675,720
–
–
331,484
–
20,349
–
986,855
1,340,417
972,714
–
–
–
–
–
–
–
–
7,790
–
815,263
–
–
400,824
–
25,356
–
1,190,731
2,534,115
2,095,181
1,117,769
–
–202
112,575
– 1,363
38,930
–
1,189,849
1,661,443
1,558,579
2,001,630
42
– 1,900
326,958
– 199
223,463
–
2,103,068
1,337,681
1,328,026
3,679,115
482
–927
799,775
1,562
232,431
–
4,247,576
1,749,808
1,608,658
714
–
–
–
–
46
–
668
730,803
811,829
6,799,228
524
– 3,029
1,239,308
–
494,870
–
7,541,161
5,479,735
5,307,092
–
–
–
–
–
–
–
–
163,214
164,343
–
–
–
–
–
–
–
–
38,901
39,053
–
–
–
–
–
–
–
–
3
11
116
–
–
–
–
–
–
116
2,978
3,482
116
–
–
–
–
–
–
116
205,096
206,889
1,969
–
–
493
–
128
–
2,334
19,417
14,958
7,616,576
524
– 3,029
1,640,625
–
520,354
–
8,734,342
8,238,363
7,624,120
|
68 69
General information
Notes on accounting policies which differ from German law
AUDI AG has the legal form of a German share-issuing
The substantial differences between IFRS and
company (Aktiengesellschaft). Its registered office
accounting policies in accordance with German law
is in Ettinger Strasse, Ingolstadt, and it is entered in
relate to the following points:
Commercial Register HR B 1 in Ingolstadt.
– Goodwill arising from the consolidation of capital
99 percent of the share capital of AUDI AG is held by Volkswagen AG, Wolfsburg, with which a control and profit transfer agreement exists. The consolidated
is reported as an asset according to IAS 22 and amortised over its useful life. – Development costs are carried as intangible assets
financial statements of AUDI AG are included in the
in accordance with IAS 38, provided that the pro-
consolidated financial statements of Volkswagen AG,
duction of the developed products is likely to bring
which are deposited with the Local Court of Wolfsburg.
economic benefit to the Audi Group. – The straight-line method of depreciation is applied
The object of the company is the development,
instead of the diminishing balance method; multi-
production and sale of motor vehicles, other vehicles
level depreciation is no longer practised. Deprecia-
and engines of all kinds, together with their acces-
tion is measured on the basis of useful life
sories, as well as machinery, tools and other technical
expectancy. Special depreciation for tax purposes
articles.
and simplifications are not permitted in the IFRS financial statements.
Primary accounting basis
– Rented property, plant and equipment are recog-
AUDI AG prepares its consolidated financial state-
nised as assets and the resulting liabilities simulta-
ments on the basis of the International Financial
neously recognised as liabilities, provided the
Reporting Standards (IFRS) and the interpretations of
economic interest in the property, plant and equip-
the International Financial Reporting Interpretations
ment can be attributed to the companies of the
Committee (IFRIC). All declarations of the Interna-
Audi Group pursuant to IAS 17.
tional Accounting Standards Board (IASB) where application is mandatory have been observed. The income statement has been drawn up accord-
– Securities are reported at their market value, even if this is higher than the cost of purchase. – Derivative financial instruments to hedge against
ing to the internationally practised function of
foreign exchange exposure are likewise reported
expense method.
at their market value in accordance with IAS 39 –
The consolidated financial statements provide a
according to the same principle as the measure-
true and fair view of the financial performance and
ment of securities – even if this is higher than the
financial position of the Audi Group.
cost of purchase.
The conditions pursuant to Section 292a of
The opportunities and risks from the measure-
German Commercial Code for exemption from the
ment of financial instruments used as a hedge for
requirement to prepare consolidated financial
items on the balance sheet (fair-value hedges) are
statements in accordance with German accounting
recognised immediately.
standards are thus met. The assessment of these
The changes in the market value of financial
conditions is based on German Accounting Standard
instruments (foreign exchange contracts and
No. 1 (DRS 1), published by the German Council for
currency option transactions) which are used for
Standardisation. To achieve equal value with consoli-
hedging future payments are handled in a differ-
dated financial statements prepared in accordance
entiated manner. Whereas the fluctuations in the
with German law, additional information pursuant to
market value of currency option transactions
Section 292a of German Commercial Code is dis-
immediately have an effect on the net profit or loss
closed.
for the period, the changes in value of foreign exchange contracts (cash flow hedges) are initially reported in a special reserve with no effect on income and only have an impact on the income statement when the hedged item is due. – Provisions are only formed where commitments to third parties exist.
Consolidated Financial Statements
– Provisions for pensions are determined pursuant
companies) are valued according to the equity
to IAS 19 according to the benefit/years of service
method, unless they are of only minor importance.
method, taking into account future pay and pen-
The interests in FAW-Volkswagen Automotive
sion increases. Actuarial gains and losses are only
Company, Ltd., Changchun, China and in YANASE
shown in the balance sheet and booked to income
Audi Sales Company Ltd, Tokyo, Japan, are included
where they exceed ten percent of the higher of
at equity for the first time in the 2003 financial year.
defined benefit obligation or the fair value of the plan assets at the start of the financial year. – Medium-term and long-term provisions are reported at their present value. – Foreign-currency receivables and liabilities are
Four foreign and eight domestic companies are not consolidated. These companies are of only minor importance for the financial performance and financial position of the group. Subsidiaries and investments are always reported
reported at the middle rate on the balance sheet
at their cost of purchase, as no active market exists
date instead of according to the principle of
for these companies and no fair value can reliably be
unequal treatment of losses and income.
determined with a justifiable amount of effort. These
– Minority interests are reported separately from shareholders’ equity under a separate item. – Pursuant to IAS 12, deferred tax is determined
subsidiaries are substantially dormant companies or companies with only limited business operations. The main companies within the Audi Group are
according to the balance sheet liabilities method.
listed after the Notes. A list of all companies in which
Tax deferrals are to be created for all temporary
shares are held is filed with the Ingolstadt Commer-
differences between the valuations in the tax
cial Register, HR B 1, and published on the Audi web-
balance sheet and the consolidated financial state-
site at www.audi.com/subsidiaries. This list can in
ments (temporary concept). Deferred tax from the
addition be requested directly from AUDI AG, Finance
carryforward of losses is in addition to be recorded.
Analysis and Publications I/FF-12, 85045 Ingolstadt, Germany.
Consolidated companies
As a result of its inclusion in Audi’s consolidated
In addition to AUDI AG, the consolidated financial
financial statements, quattro GmbH, Neckarsulm,
statements include all key companies where AUDI AG
is released from the obligation to disclose its annual
directly or indirectly has scope for determining the
accounts pursuant to Section 264 Para. 3 of German
financial and business policy in such a way that other
Commercial Code.
group companies benefit from the activities of the companies in question (subsidiaries). Consolidation
Consolidation principles
begins at that point in time from which it acquires the
The assets and liabilities of the domestic and foreign
opportunity for control; it ends when that opportunity
companies included in the consolidated financial
ceases to be available.
statements are measured in accordance with the
The Audi Group includes AUDI AG, the compa-
standard accounting policies of the Audi Group. The
nies AUDI HUNGARIA MOTOR Kft. and COSWORTH
same accounting policies for determining the pro rata
TECHNOLOGY LIMITED, the four companies of the
equity are applied for the companies valued at equity.
Lamborghini Group, AUTOGERMA S.p.A., AUDI DO
The last set of audited accounts of the company in
BRASIL E CIA., quattro GmbH and AUDI SENNA Ltda.
question serves as the basis for this purpose.
The companies Audi Vertriebsbetreuungsgesellschaft
For subsidiaries fully consolidated for the first
mbH, Ingolstadt, Audi Synko GmbH, Ingolstadt, Audi
time, the assets and liabilities are to be recognised at
Zentrum Hannover GmbH, Hanover, Audi Japan K.K.,
their fair value at the time of acquisition. If the acqui-
Tokyo, Japan, and Audi Australia Pty. Ltd., Homebush
sition costs of the subsidiaries exceed the group’s
Bay, Australia, are fully consolidated for the first time
interest in the shareholders’ equity calculated in this
in the 2003 financial year. The inclusion of these
way for the individual company, goodwill to be capi-
companies does not substantially affect the compara-
talised arises. The resulting undisclosed accruals and
bility of the financial statements for 2003 with the
provisions as well as charges are carried, depreciated
previous year’s accounts.
or dissolved in accordance with the corresponding
Companies where AUDI AG is able to exercise significant direct or indirect influence on financial
assets and liabilities. Goodwill is capitalised and depreciated on a straight-line basis over its useful life.
and operating policy decisions (so-called associated
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70 71
Receivables and liabilities between consolidated companies are offset, and expenditure and income eliminated. Intra-group profits have been eliminated from group inventories and fixed assets. Consolidation processes affecting income are subject to deferrals of income taxes, with deferred tax assets and liabilities offset where the term and tax creditor coincide. The same consolidation principles were applied in the financial statements for both 2002 and 2003. Foreign currency translation The currency of the Audi Group is the euro. Foreign currency transactions in the separate financial statements of AUDI AG and the subsidiaries are translated at the prevailing exchange rate on the date of the transaction. Monetary items in foreign currency are reported at the balance sheet date on the basis of the exchange rate on that date. Exchange differences are booked to the current-period result. The foreign companies belonging to the Audi Group are foreign entities which prepare their financial statements in their local currency. AUDI HUNGARIA MOTOR Kft. is the sole exception, as it prepares its annual financial statements in euros. The concept of the “functional currency” is applied when translating financial statements prepared in foreign currency. Assets and liabilities are translated at the closing rate. The effects of foreign currency translation on equity are reported in the reserve for foreign currency translation. The items in the income statement are translated using weighted average monthly rates. Exchange differences resulting from the use of diverging exchange rates in the balance sheet and income statement are offset against equity with no effect on income. Closing rate EUR 1 =
Average rate
Dec. 31, 2003
Dec. 31, 2002
Dec. 31, 2003
Australia (AUD)
1.6802
1.8556
1.7380
1.7362
Brazil (BRL)
3.6486
3.7050
3.4729
2.7838
Great Britain (GBP) Japan (JPY) People’s Republic of China (CNY)
As all consolidated subsidiaries have their registered offices in countries in which there is currently no hyperinflation, IAS 29 does not apply.
Dec. 31, 2002
0.7048
0.6505
0.6919
0.6287
135.0500
124.3900
130.9390
118.0613
10.4535
8.6832
9.3592
7.8198
Consolidated Financial Statements
Notes to the consolidated income statement
3 Distribution costs
1 Revenue
Distribution costs substantially comprise expenses for marketing and sales promotion, advertising,
Revenue is always recorded at the time of perfor-
public relations activities and outward freight, as well
mance of the services or delivery of the goods or
as depreciation for the sales sector.
products, in other words upon passage of risk to the customer. The percentage of completion method
4 General administrative costs
is only applied in exceptional cases, as the dates on which a service is commenced and completed
The general administrative costs include labour
regularly fall within the same accounting period.
and materials costs, as well as depreciation for the administrative sector.
Group revenue according to products
5 Other operating income EUR ‘000 Audi brand Audi A2
2003
2002
17,138,628
16,705,861
387,582
535,791
EUR ‘000 Income from rebilling
Audi A3/Audi TT
3,415,572
2,810,976
Income from the reversal
Audi A4/Cabriolet
8,043,385
8,055,273
of provisions and accruals
Audi A6
4,101,518
4,759,095
Income from realised
Audi A8
1,190,571
544,726
172,939
81,674
Lamborghini brand Volkswagen Passenger Cars brand SEAT brand Škoda brand Total revenue for cars
Other sales Total revenue
2002 227,325
234,686
108,936
112,212
57,758
66,014
62,510
56,331
50,242
3,110
3,817
2,405
2,638
418
1,708
117,815
124,605
840,867
639,539
derivative currency hedging transactions Income from ancillary
2,115,050
2,423,094
436,921
428,559
Income from the
235,373
219,660
processing of payments
20,098,911
19,858,848
business
in foreign currency Income from asset disposals
Volkswagen Commercial Vehicles brand
2003 247,876
86,486
98,144
3,220,154
2,645,651
23,405,551
22,602,643
Income from rented lessor’s assets Income from the liquidation of allowances for liabilities and other assets
Revenue is categorised by region for the purpose of
Miscellaneous operating
segment reporting, along the same lines as those
income
used for internal group steering and reporting.
Total other operating
The other sales above all constitute goods and
income
services supplied to affiliated companies and other sales to third parties. Income from the processing of payments in foreign 2 Cost of sales
currency substantially comprises gains resulting from exchange-rate movements between the dates of out-
The cost of sales comprises the costs incurred in gen-
put and payment, and exchange-rate gains as a result
erating revenue and cost prices in commercial trans-
of valuation at the average rate on the closing date.
actions. This item also includes expenses resulting
In the same way, exchange rate losses are reported
from the creation of provisions for warranty costs and
under Other operating expenses, item 6.
for development costs which cannot be capitalised.
The overall item of currency hedging transactions is shown under Other particulars, item 2.1.
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72 73
6 Other operating expenses
The other income from investments relates above all to a share in the profits of Volkswagen Transport
EUR ‘000
2003
2002
Losses on asset disposals
30,275
139,800
Amortisation of goodwill
46,277
44,426
58,239
52,203
GmbH & Co. OHG. The prior-year figure also contains the dividends from FAW-Volkswagen Automotive Company, Ltd. which is now valued at equity.
Expense from the
8 Net interest
processing of payments in foreign currency
EUR ‘000
Expense from realised hedging transactions
21,059
7,099
and borrowings
Allowances for receivables
10,179
6,896
Income from the valuation
119,660
200,798
at market value
Miscellaneous operating Total other operating income
2002
–
379
98,731
14,452
2,125
–
26,992
3,529
69,614
10,923
11,897
13,298
–
2,044
1,789
10,754
10,108
500
48,253
52,597
21,546
22,369
43,358
73,578
41,407
52,204
Income from securities
derivative currency
expenses
2003
of assets and liabilities of marketable securities
285,689
451,222
and of long-term borrowings of derivative financial
The expenses resulting from the disposal of assets
instruments
include disposals of capitalised development costs as
Expense from the valuation
well as property, plant and equipment. The overall
at market value
item of currency hedging transactions is shown under
of assets and liabilities
Other particulars, item 2.1.
of marketable securities and of long-term
7 Result for holdings valued at equity and other
borrowings
investment result
of derivative financial instruments
EUR ‘000
2003
2002
54,286
–
similar income
Income from holdings valued at equity
991
3,317
17,749
41,041
17,749
24,250
–
16,791
782
–
Interest expense included in leasing instalments
of which from investments
of which to affiliated companies
of which from affiliated companies
Other interest and similar expenses
Other income from investments
of which from affiliated companies
Income from profit transfer agreements
Other interest and
Total net interest
534
955
91,195
– 20,403
Expense from holdings valued at equity
Interest income and expenses are attributed on an
Expense from the transfer of losses Total investment result
318
1,985
71,926
42,373
accrual basis. The overall item of currency hedging instruments is shown under Other particulars, item 2.1.
In the previous year, the income from profit transfer agreements relates substantially to Audi Vertriebsbetreuungsgesellschaft mbH.
Consolidated Financial Statements
Deferrals amounting to the anticipated tax burden
9 Other financial results
or tax relief in subsequent financial years are created EUR ‘000
2003
2002
for pensions
– 91,042
– 85,689
– 21,786
– 17,786
Total other financial results
– 112,828
– 103,475
of the distribution of profits are not recognised until the resolution on the appropriation of profits is
Compounding of other reserves
on the basis of the likely tax rate at the time of realisation. In accordance with IAS 12, the tax consequences
Compounding of provisions
passed. Deferred tax assets include future tax relief resulting from temporary differences between the carrying amounts in the consolidated balance sheet and the
10 Income tax expense
valuations in the tax balance sheet. Deferred tax assets on tax loss carryforwards that can be realised
Income tax expense includes taxes passed on by
in the future and from tax relief are also recorded.
Volkswagen AG on the basis of the single-entity
Deferred tax assets and deferred tax liabilities are
relationship between the two companies for tax pur-
netted, provided there is identity of the tax creditors
poses, along with taxes owed by AUDI AG and its
and maturities.
consolidated subsidiaries, as well as deferred taxes.
An adjustment of value is performed for deferred tax assets which are unlikely to be realised. The current German taxes are measured at the tax
Composition of tax expense
rate of 39.7 percent (38.3 percent). This represents EUR ‘000 Current tax expense of which for Germany
2002 447,445
cent, the solidarity surcharge of 5.5 percent and the
473,322
361,107
average trade earnings tax rate for the group. The
8,410
86,338
statutory corporate income tax rate was raised once
of which for other countries
2003 tax assessment period. Deferred taxes were
expense not relating to – 9,874
– 3,616
reversal of tax provisions
– 17,401
– 92
Deferred tax income/expense
– 189,217
32,697
– 82,922
36,409
countries
The national income tax rates applicable for foreign companies range from 16 percent to 40 percent. AUDI HUNGARIA MOTOR Kft. was included in the calculation of deferred taxes for the first time in the
of which for other Total income tax expense
measured accordingly at a rate of 38.3 percent in the current financial year.
of which income from the
of which for Germany
to 26.5 percent (plus the solidarity surcharge of 5.5 percent) as a result of the Flood Relief Act for the
of which tax income/ the period
the sum of the corporate income tax rate of 26.5 per-
2003 481,732
– 106,295
– 3,712
292,515
480,142
current financial year. As a result of the bringing in line of Hungarian law with the framework conditions of the European Union for investments subsidies, tax relief on capital investments resulted in deferred
Of the current tax expense, an amount of EUR 473
tax assets totalling EUR 98 million, which have been
million (EUR 361 million) was passed on to
included in income.
Volkswagen AG. Pursuant to IAS 12, deferred tax is determined according to the balance sheet liabilities method. This method specifies that tax deferrals are to be created for all temporary differences between the valuations in the tax balance sheet and the consolidated financial statements (temporary concept). Deferred tax from the carryforward of losses is in addition to be recorded.
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74 75
The realisation of tax losses resulted in a reduction of EUR 5 million (EUR 1 million) in current income tax expense in 2003. There exist outstanding loss carryforwards totalling EUR 194 million, of which an amount of EUR 95 million can be used indefinitely. Deferred tax totalling EUR 13 million (EUR 11 million) relates to business transactions (cash flow hedges) charged directly to equity. Tax-rate changes produced deferred tax income of EUR 4 million. The following deferred tax assets and liabilities carried in the balance sheet are attributable to reporting and valuation differences in the individual balance sheet items: Deferred tax assets EUR ‘000 Intangible assets Property, plant and equipment
Deferred tax liabilities
Dec. 31, 2003
Dec. 31, 2002
Dec. 31, 2003
Dec. 31, 2002
2,001
552
842,473
812,306
117,941
82,405
370,079
401,540
Financial assets
52,160
35,553
209
229
Inventories
18,877
13,372
4,877
2,289
Receivables and other assets
23,403
9,746
67,090
23,461
Other current assets
98,771
75
9,299
1,424
Provisions for pensions
116,018
116,003
392
492
Other provisions
382,134
321,872
0
12,702
32,050
22,868
11,172
8,512
2,723
3,877
–
–
846,078
606,323
1,305,591
1,262,955
Liabilities Loss carryforwards Gross value of which long-term Offsetting measures Consolidation measures Carrying amount
531,689
359,141
1,006,029
1,031,105
– 608,436
– 474,993
– 608,436
– 474,993
6,058
5,695
– 1,388
–
243,700
137,025
695,767
787,962
Consolidated Financial Statements
Reconciliation from anticipated to actual income tax
13 Earnings per share
expense The anticipated tax expense is higher than the actual
Basic earnings per share are calculated by dividing
tax expense. The reasons for the difference between
the profit share due to AUDI AG shareholders by the
the anticipated and actual tax expense are as follows:
weighted average number of shares outstanding during the financial year. In the case of Audi, the diluted earnings per share
Reconciliation
are the same as the basic earnings per share, as there EUR ‘000 Accounting profit
2003
2002
1,108,300
1,254,499
439,995
480,473
were no potential shares in AUDI AG in existence at either December 31, 2002 or December 31, 2003.
Anticipated income tax expense 39.7% (38.3%) Reconciliation: Divergent foreign tax burden
– 119,013
– 98,888
Tax portion for: Tax-exempt earnings
– 26,128
– 10,895
– 98,300
–
813,086
771,556
43,000,000
43,000,000
18.91
17.94
Weighted average number of shares (basic and diluted totals are identical) Earnings per share in EUR
Expenses not deductible for tax purposes
2002
shareholders in EUR thousand
Tax relief on capital investments
2003 Profit share of AUDI AG
41,286
17,460
Temporary differences
Outside shareholders in AUDI AG receive a compen-
and losses for which no
satory payment for each individual share certificate
deferred tax has been recorded
38,243
46,699
relating to the period
– 9,874
– 3,569
Effects of tax-rate changes
– 3,709
2,220
Other tax effects
30,015
46,642
292,515
480,142
26.4
38.3
Actual income tax expense Effective tax rate in %
instead of a dividend for the 2003 financial year. The level of this payment corresponds to the dividend that
Tax income/expense not
is paid on one Volkswagen AG ordinary share. The dividend payment will be determined by the Annual General Meeting of Volkswagen AG on April 22, 2004.
11 Profit share of minority shareholders The profit due to other shareholders is in respect of shareholders of AUDI SENNA Ltda. and also Audi Australia Pty. Ltd., which was fully consolidated for the first time in 2003. 12 Profit transfer to Volkswagen AG On the basis of the profit transfer agreement with AUDI AG, an amount of EUR 160 million (EUR 185 million) is to be transferred to Volkswagen AG.
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76 77
Notes to the consolidated balance sheet
The depreciation plan is based principally on the following useful lives:
14 Intangible assets Useful life EUR ‘000
Dec. 31, 2003
Dec. 31, 2002
Concessions, industrial
Concessions, industrial property rights and similar rights and values
3 – 15 years
of which software
property rights and similar rights and values, as well as licences thereto Goodwill
94,552
61,190
173,231
216,918
3 years
Goodwill
5 – 10 years
Capitalised development costs
5 – 10 years
Capitalised development
The depreciation is allocated to the corresponding
costs for
functional areas; the amortisation of goodwill is
products currently in development
1,005,406
907,800
products currently in use
1,403,181
1,340,417
1,946
7,790
2,678,316
2,534,115
included in other operating expenses. In accordance with IAS 36 impairment is recognised on intangible assets where the recoverable
Payments on account for intangible assets
amount of the asset in question has fallen below the carrying value. If the reasons for impairment in previous years cease to apply, the corresponding amounts are written back. There was no need for either recog-
Measurement principles
nition of impairment or write-backs in the period
Intangible assets acquired for consideration are
under review.
reported at cost of purchase, taking account of ancillary costs and cost reductions, and depreciated on a
Research and development expenses
scheduled straight-line basis over their economic life. Concessions, rights and licences relate to purchased computer software and subsidies paid. Goodwill is amortised on a scheduled straight-line basis over its useful life. Research costs are treated as current expenses in
EUR ‘000
2003
2002
620,539
501,199
475,714
398,532
1,096,253
899,731
Research costs and non-capitalised development costs Depreciation and
accordance with IAS 38. The development costs of
disposals of capitalised
products going into series production are capitalised,
development costs
provided that the production of these products is
Total research and
likely to bring economic benefit to the Audi Group.
development expenses
If the conditions for capitalisation are not met, the expenses are booked to the current-period result in the year in which they occur. Capitalised development costs comprise all costs
Spending on research and development activities in the 2003 financial year totalled EUR 1,257 million
directly allocable to the development process, as well
(EUR 1,335 million). Of this total, EUR 636 million
as an appropriate portion of the development-related
(EUR 834 million) satisfy the criteria for capitalisation
overhead costs. Borrowing costs are not capitalised.
according to IAS 38.
Depreciation is performed on a straight-line basis from the start of production, over the anticipated model life of the developed products.
Consolidated Financial Statements
15 Property, plant and equipment
Minor assets with a cost of purchase of up to EUR 410 are fully written off in the year of acquisition.
EUR ‘000
Dec. 31, 2003
Dec. 31, 2002
Impairment of property, plant and equipment pur-
Land, land rights and
suant to IAS 36 is recognised where the recoverable
buildings, including
amount of the asset in question has fallen below the carrying value. Impairment losses totalled EUR 96
buildings on land owned by others
1,765,138
1,661,443
million (EUR 97 million). If the reasons for impairment
Plant and machinery
1,284,078
1,337,681
in previous years cease to apply, the corresponding amounts are written back.
Other fixtures and fittings, tools and equipment
1,802,846
1,749,808
capitalised if the conditions of a finance lease are
and fittings, tools and equipment
5,564
10,039
659,582
730,803
5,511,644
5,479,735
met, in other words if the significant risks and opportunities which result from its use have passed to the
Payments on account and construction in progress
In accordance with IAS 17, property, plant and equipment used on the basis of lease agreements is
of which leased fixtures
lessee. Capitalisation is performed at the time of the agreement, at cost of purchase or cost of sales, or at the present value of the minimum lease payments if lower. The straight-line depreciation method is
Measurement principles
based on economic life, or on the term of the lease
Property, plant and equipment are measured at cost
contract if shorter. Payment commitments from future
of purchase or cost of sales, less scheduled straight-
lease instalments are recognised as a liability, without
line depreciation according to the pro rata temporis
future interest costs being taken into account.
method.
Payments totalling EUR 55 million (EUR 51 million)
The cost of purchase includes the purchase price, ancillary costs and cost reductions.
for assets rented on the basis of operating lease agreements were recognised as an expense.
In the case of self-constructed fixed assets, the cost of sales includes both the directly allocable cost of materials and cost of labour, and indirect materials and indirect labour, together with pro rata depreciation. Interest on borrowings is not included. The depreciation plan is based principally on the following useful lives: Useful life Buildings
25 – 50 years
Plant fixtures
10 – 18 years
Plant and machinery
6 – 12 years
Tools and equipment, including special tools
3 – 15 years
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78 79
16 Holdings valued at equity and other financial assets Carrying values EUR ‘000
Fair values
Dec. 31, 2003
Dec. 31, 2002
Dec. 31, 2003
Dec. 31, 2002
Shares in affiliated companies
137,398
163,214
137,398
163,214
Companies valued at equity
103,527
–
103,527
–
11,256
38,901
11,256
38,901
1,394
–
1,394
–
14,809
–
14,809
–
–
3
–
3
2,505
2,978
1,965
2,481
270,889
205,096
270,349
204,599
Investments Loans to affiliated companies Loans to companies valued at equity Loans to companies linked through participation Other loans
The change in holdings in affiliated companies resulted principally from the first-time consolidation of Audi Japan K.K., Audi Australia Pty. Ltd., Audi Vertriebsbetreuungsgesellschaft mbH and Audi Synko GmbH. The companies valued at equity are the interests in FAW-Volkswagen Automotive Company, Ltd. and YANASE Audi Sales Company Ltd. Measurement principles Companies where AUDI AG is able to exercise significant direct or indirect influence on financial and operating policy decisions (associated companies) are valued according to the equity method. Shares in non-consolidated affiliated companies and investments are always shown at their respective cost of purchase, as no active market exists for these companies and no fair value can reliably be determined with a justifiable amount of effort. The fair values of medium and long-term loans are determined by discounting at risk-adequate market rates, and deviate from the carrying amounts recognised at amortised cost. In the case of short-term items, the amortised cost corresponds to the fair value. Loans are measured at the amortised cost using the effective interest method. The fair values to be indicated in addition in the Notes are determined by discounting future cash flows at the market rate.
Consolidated Financial Statements
Impairment of financial assets is recognised if
Measurement principles
the market or stock market value has fallen below
Raw materials and consumables used are measured
the carrying value. If the reasons for impairment in
at the updated average cost of purchase or at the
previous years cease to apply, the corresponding
lower replacement value.
amounts are written back. There was no need for
Ancillary costs of purchase and purchase cost
recognition of impairment in the period under review.
reductions are taken into account as appropriate.
17 Rented lessor’s assets
cost of sales or at the lower replacement value. The
Work in progress and finished goods are valued at cost of sales includes direct materials and direct Land and buildings held for the purpose of generat-
labour, as well as an appropriate portion of the indi-
ing rental income (investment property pursuant
rect materials and indirect labour, production-related
to IAS 40) are reported under rented lessor’s assets.
depreciation and the expenditure allocable to the
The fair values of the rented lessor’s assets corre-
products from the depreciation of capitalised devel-
spond to the carrying values.
opments in series production. Distribution costs, general administrative costs and interest on borrow-
Measurement principles
ings are not capitalised.
The rented lessor’s assets are measured at amortised cost. Buildings are depreciated on the basis of a useful life of 33 years.
Merchandise is valued at cost of purchase or at the lower replacement value. Provision has been made for all discernible storage and inventory risks by way of appropriate value
18 Inventories
adjustments. Individual downward valuation adjustments are made on all inventories as soon as the
EUR ‘000
probable proceeds from their sale or use are lower
Dec. 31, 2003
Dec. 31, 2002
consumables used
369,372
311,061
amount the inventories are expected to raise less the
Work in progress
264,396
276,514
costs incurred up to their sale is taken as the lower
1,170,279
1,112,600
10,026
10,326
1,814,073
1,710,501
than the carrying values of the inventories. The
Raw materials and
replacement value.
Finished goods and merchandise
19 Receivables
Payments on account for inventories
Measurement principles Receivables and other assets are valued at the nominal amount or at the amortised cost. Provision is
Of total inventories, EUR 291,986 thousand
made for discernible one-off risks and general credit
(EUR 343,264 thousand) are reported at the lower net
risks in the form of appropriate value adjustments.
realisable value.
The fair value is determined by discounting the
No write-back was performed in the financial year.
medium and long-term asset items at market rates. In
There are no significant restrictions on ownership
the case of short-term items, the fair value corre-
or disposal for the reported inventories.
sponds to the amortised cost.
The finished goods and merchandise figure for 2003 includes inventories to the value of EUR 122,851 thousand for the companies consolidated for the first time.
|
80 81
20 Trade receivables
EUR ‘000
Time to maturity over 1 year
Carrying values
Dec. 31, 2003
Dec. 31, 2002
Dec. 31, 2003
Dec. 31, 2002
Trade receivables from third parties
1,355
15,550
815,415
676,112
affiliated companies
–
–
268,774
367,947
associated companies
–
–
145,840
62,230
companies linked through participation
–
–
783
75
1,355
15,550
1,230,812
1,106,364
The fair value of trade receivables amounts to EUR 1,230,810 thousand (EUR 1,105,828 thousand). 21 Other receivables and assets
EUR ‘000 Other receivables from affiliated companies of which from derivative currency hedging instruments
Time to maturity over 1 year
Carrying values
Dec. 31, 2003
Dec. 31, 2002
Dec. 31, 2003
Dec. 31, 2002
–
–
347,727
304,704
–
–
170,370
58,633
Other receivables from associated companies
–
–
30,240
1,040
Other receivables from investments
–
–
62
–
14,045
63,680
155,778
107,870
9,555
8,100
189,643
124,252
Other tax claims Other assets Assets from derivative currency hedging instruments
The other receivables and assets have a fair value of EUR 723,520 thousand (EUR 538,171 thousand). There are no significant restrictions on ownership or disposal for the reported receivables and other assets. Derivative currency hedging instruments are measured at market value. The market values are indicated by the following summary: EUR ‘000
Dec. 31, 2003
Dec. 31, 2002
82,435
42,660
88,062
16,065
Derivative currency hedging instruments Cash flow hedges Currency option transactions Currency swaps
–
275
170,497
59,000
The overall item of currency hedging instruments is shown under Other particulars, item 2.1.
–
44
127
367
23,600
71,824
723,577
538,233
Consolidated Financial Statements
22 Securities
27 Capital reserves
Marketable securities comprise fixed-interest or
The capital reserves contain shareholder contribu-
variable-interest securities and shares.
tions from the issue of shares in the company.
The rates of return ranged between 3.04 percent
It remained unchanged at EUR 56,730 thousand on
and 8.00 percent.
December 31, 2003.
Measurement principles
28 Revenue reserves
Marketable securities are measured at market value, in other words at the stock market prices at the
EUR ‘000
balance sheet date.
Legal reserve
Dec. 31, 2003
Dec. 31, 2002
131
131
37,228
16,916
– 32,075
– 3,935
Reserve for
23 Cash
cash flow hedges Reserve for foreign
EUR ‘000
Dec. 31, 2003
Dec. 31, 2002
1,207,197
540,058
Balances with banks and affiliated companies
exchange differences Other revenue reserves
Cheques and cash in hand
322
205
1,207,519
540,263
5,486,192
4,759,993
5,491,476
4,773,105
The opportunities and risks from foreign exchange contracts serving as hedges for future payments are The rates of return for overnight money and term
deferred with no effect on income in the reserve for
money ranged between 1.98 percent and 3.10 per-
cash flow hedges. When the cash flow hedges fall
cent.
due, the results from the settlement of the exchange-
Balances existed with various banks and in various currencies. Liquid funds were invested with affiliated companies via the cash pooling arrangements.
rate hedging contracts are reported under the other operating result. The balance of EUR 653,086 thousand (EUR 586,556 thousand) remaining after the transfer
Measurement principles
of profit to Volkswagen AG and after deduction of the
Cash is measured at nominal value.
profit share of minority shareholders is allocated to the other revenue reserves.
24 Deferred tax assets 29 Minority interests The temporary differences between the valuations in the tax balance sheet and the consolidated financial
Minority interests in the shareholders’ equity relate to
statements are explained in item 10.
AUDI SENNA Ltda., São Paulo, and Audi Australia Pty. Ltd., Homebush Bay.
25 Prepaid expenses Prepaid expenses are used for the determination of profit on an accrual basis. Expenditure that does not result in expenses until after the balance sheet date is shown on the assets side. 26 Issued capital The issued capital of AUDI AG totals EUR 110,080,000. Each share represents a mathematical share of EUR 2.56 in the share capital. It is divided into 43,000,000 bearer individual share certificates.
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82 83
30 Provisions Terms of provisions Time to maturity over 1 year
Total
Dec. 31, 2003
Dec. 31, 2002
Dec. 31, 2003
Dec. 31, 2002
1,428,078
1,363,970
1,483,743
1,413,591
10,329
–
46,126
51,796
Other provisions
1,077,703
800,329
2,531,473
2,214,206
Total
2,516,110
2,164,299
4,061,342
3,679,593
EUR ‘000 Provisions for pensions Tax provisions
Provisions for pensions
The calculation is based on the following individual
Provisions to cover pension obligations are created
actuarial assumptions:
on the basis of plans to provide retirement, invalidity and surviving dependents’ benefits. They relate
%
exclusively to benefit commitments for employees of
Remuneration trend
2.75 – 3.50
2.75 – 3.50
AUDI AG, Audi Vertriebsbetreuungsgesellschaft mbH,
Retirement benefit trend
1.50 – 3.64
1.50 – 2.50
AUTOGERMA S.p.A., Audi Japan K.K. and COSWORTH
Interest rate
3.00 – 5.75
5.50 – 5.75
TECHNOLOGY LIMITED. The benefit amounts generally
Fluctuation rate
1.40
1.40
depend on the length of service and the remuneration
Expected return on
of the employees.
plan assets
6.75 – 7.50
6.75 – 7.50
Dec. 31, 2003
Dec. 31, 2002
Within the Audi Group, a distinction is made between benefit systems based on provisions and those financed externally via pension funds. The pension fund model introduced at AUDI AG
The biometric mortality was determined using the “1998 Reference Tables” by Dr. K. Heubeck.
on January 1, 2001 is based on contribution-based retirement benefit commitments, which are classified
Progression from benefit/years of service to provisions
as benefit commitments pursuant to IAS 19. The
for pensions to meet retirement benefit commitments
remuneration-based annual cost of commitments is
recognised in the balance sheet:
invested in funds on a fiduciary basis by Volkswagen Pension Trust e.V. This model offers AUDI AG employ-
EUR ‘000
ees the opportunity to increase their benefit entitle-
Benefit/years of service
ments, while providing full risk cover. As the units
of externally financed
administrated on a fiduciary basis satisfy the require-
obligations
ments of IAS 19 as assets, these funds were offset
Fair value of plan assets
against the retirement benefit obligations derived
Surplus
from them.
Benefit/years of service
Obligations for retirement benefits are measured
Dec. 31, 2003
Dec. 31, 2002
169,111
113,843
– 135,039
– 78,383
34,072
35,460
1,553,079
1,495,119
– 103,408
– 116,988
1,483,743
1,413,591
of non-externally financed
according to the benefits/years of service method
obligations
(projected unit credit method) pursuant to IAS 19.
Unrecognised actuarial
Here, the future commitments are measured on the
losses
basis of benefit entitlements acquired pro rata at the
Provisions recognised in the
balance sheet date. For purposes of measurement,
balance sheet
trend assumptions are used for the relevant quantities which affect the level of benefit. Actuarial gains and losses result from changes in the number of people participating in the pension scheme and from a deviation in the actual trends (for example, increases in pay or retirement benefit) from the figures assumed for calculation purposes. Such gains and losses are only booked to income where
Consolidated Financial Statements
they exceed ten percent of the higher of retirement
The provisions for pensions recorded in the balance
benefit obligations or the fair value of the plan assets
sheet changed as follows:
on the reporting date. In accordance with IAS 19, this residual amount is shown in the balance sheet on the
EUR ‘000
basis of the future average remaining working life
Provisions for pensions
of the employees and included in the revenue results.
at January 1
2003
2002
1,413,591
1,356,804
Changes to the group
The amounts recognised in the income statement
(new pension plans)
are as follows:
Retirement benefit cost
844
–
161,874
144,146
– 50,308
– 46,115
– 42,367
– 42,980
1,639
10,452
– 1,370
– 8,569
– 160
– 147
1,483,743
1,413,591
Payment of retirement EUR ‘000
Dec. 31, 2003
Dec. 31, 2002
benefits from company
Current service cost
assets
for services rendered by
Contributions to external pension funds
employees in the financial year
76,504
65,483
Transfers received from
Interest cost
91,042
85,689
affiliated companies Transfers to affiliated
Expected return on plan assets
– 6,989
– 7,230
recognised in year
1,318
168
–1
36
161,874
144,146
Provisions for pensions at December 31
Currency differences from foreign schemes
companies Currency differences
Net actuarial losses
Total expense and income
Tax provisions
recognised in the income statement
The tax provisions include obligations for ongoing taxes on income and for other taxes. The deferred tax liabilities are explained separately under items 10
The interest element in pension costs is shown
and 35.
as interest expense in the other financial results. The actual gain from plan assets totalled EUR 14,914 thousand in the past financial year (against a loss of EUR 11,938 thousand in the previous year).
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84 85
Other provisions Jan. 1, 2003 EUR ‘000
Changes
Con-
Liqui-
Allo-
Com-
to the
sumed
dated
cated/
pounded
group
Dec. 31, 2003
new
Obligations from sales operations Workforce costs
1,795,757
48,536
861,955
161,386
1,161,488
19,397
2,001,837
241,263
1,842
49,253
969
113,463
238
306,584
Miscellaneous provisions Total
177,186
1,592
87,700
9,398
139,221
2,151
223,052
2,214,206
51,970
998,908
171,753
1,414,172
21,786
2,531,473
Measurement principles
Commitments to the workforce are substantially in
In accordance with IAS 37, provisions are created if
respect of long-service awards, outstanding vacation,
an obligation existing towards third parties is likely to
accumulated overtime, awards for suggested im-
lead to cash outflows and where the amount of the obli-
provements, ex gratia payments and pre-retirement
gation can reliably be estimated. If these criteria are not
part-time arrangements.
met, the obligations in question are reported under contingent liabilities.
The miscellaneous provisions relate to a wide range of one-off risks.
Pursuant to IAS 37, the miscellaneous provisions for all discernible risks and uncertain liabilities are reported 31 Liabilities at their probable cost and not offset against recourse entitlements. Provisions with over one year to maturity are
Measurement principles Short-term liabilities are reported at the repayment
measured at their discounted settlement value at the bal- or settlement value. Medium and long-term liabilities ance sheet date. Market rates are used as the discount rates. The settlement value also includes the cost
are carried in the balance sheet at amortised cost. The fair values to be indicated in addition are
increases to be taken into account at the balance sheet
determined by discounting future streams of pay-
date, according to IAS 37.
ments at market rates.
The obligations from sales operations comprise
Liabilities from financial lease agreements are car-
all risks from the sale of vehicles, components and origi- ried at the present value of the leasing instalments. nal parts, including the disposal of end-of-life vehicles. These are for the most part warranty claims that are determined on the basis of the previous or the estimated future loss experience. This item in addition includes provisions for discounts, bonuses and similar to be granted on the basis of legal or constructive obligations, arising after the balance sheet date but occasioned by sales before the balance sheet date.
Consolidated Financial Statements
32 Short-term and long-term debt Dec. 31, 2003
Dec. 31, 2002
Time to maturity
Carrying values
EUR ‘000
Time to
Carrying
maturity
values
up to 1 year
1 – 5 years
over 5 years
4,152
13,335
2,796
20,283
–
–
4,489
1,309
–
5,798
5,703
10,120
17,702
–
–
17,702
–
13,702
Liabilities from banks
over 1 year
Liabilities from financial lease agreements Liabilities from cash pooling Liabilities from factoring companies
162,231
–
–
162,231
–
147,768
188,574
14,644
2,796
206,014
5,703
171,590
The deposits from banks relate predominantly to the financing of Audi Japan K.K., which was consolidated in the Audi Group for the first time in 2003. Measurement of the financial lease agreements is based on an interest of 6.5 percent p.a. in each case. These agreements will incur a finance charge totalling EUR 268 thousand over the next few years. The liabilities from factoring companies have been reclassified as short-term and long-term debt instead of other liabilities. 33 Trade payables Dec. 31, 2003
Dec. 31, 2002
Time to maturity EUR ‘000
Carrying
Time to
Carrying
values
maturity
values
up to 1 year
1 – 5 years
over 5 years
over 1 year
1,826,719
2,200
–
1,828,919
8,000
1,743,863
265,485
–
–
265,485
–
162,718
38,362
–
–
38,362
_
90
3,288
2,476
–
5,764
–
171
2,133,854
4,676
–
2,138,530
8,000
1,906,842
Trade payables in respect of third parties affiliated companies associated companies other companies linked through participation
The fair value of trade payables in respect of third parties amounts to EUR 1,828,847 thousand (EUR 1,743,672 thousand). Liabilities to affiliated companies have a fair value of EUR 265,485 thousand (EUR 162,718 thousand). In the case of short-term items, the fair value corresponds to the amortised cost. No interest is calculated on the medium and longterm liabilities. The customary retention of title moreover applies for liabilities from deliveries of goods.
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86 87
34 Other liabilities Dec. 31, 2003
Dec. 31, 2002
Time to maturity
Carrying values
EUR ‘000
Time to
Carrying
maturity
values
up to 1 year
1 – 5 years
over 5 years
19,428
–
–
19,428
–
6,223
540,813
147,309
158,200
846,322
289,569
772,990
273,303
140,000
158,200
571,503
282,200
457,390
19,613
–
–
19,613
–
15,172
15
–
–
15
–
12
Advances received for orders
over 1 year
Liabilities to affiliated companies of which income taxes of which from derivative currency hedging instruments Liabilities to companies linked through participation Derivative currency hedging instruments Other liabilities of which taxes
3,094
168
–
3,262
–
71
544,054
17,126
9,962
571,142
24,317
513,208
138,200
162
–
138,362
434
126,431
of which in respect of social insurance
95,830
4,928
5
100,763
4,541
94,530
1,107,404
164,603
168,162
1,440,169
313,886
1,292,504
The liabilities to affiliated companies have a fair value
35 Deferred tax liabilities
of EUR 841,483 thousand (EUR 772,990 thousand). In the case of liabilities to companies linked through
The temporary differences between the valuations in
participation, the carrying values correspond to the
the tax balance sheet and the consolidated financial
fair values.
statements are explained in item 10.
Derivative currency hedging instruments are reported at market values. The market values are indi-
36 Deferred income
cated by the following summary: Deferred income is used for the determination of EUR ‘000
Dec. 31, 2003
Dec. 31, 2002
profit on an accrual basis. Receipts that do not result
Derivative currency
in income until after the balance sheet date are
hedging instruments
shown on the liabilities side.
Cash flow hedges Currency swaps
– 22,098
– 15,243
– 777
–
– 22,875
– 15,243
The overall item of currency hedging instruments is shown under Other particulars, item 2.1.
Consolidated Financial Statements
Other particulars
1.1 Primary financial instruments “Loans and receivables originated by the enterprise”
1 Financial instruments
and liabilities are measured at amortised cost. These include in particular
Financial instruments refer to any contract that gives
– financial investments,
rise to both a financial asset of one enterprise and a
– trade accounts receivable and payable,
financial liability or equity instrument of another
– other short-term receivables and liabilities.
enterprise. They include both primary instruments and derivative instruments or obligations. Derivative
In the case of short-term receivables and liabilities,
financial instruments are used as a hedge for items
the amortised cost corresponds to the notional or
on the balance sheet and for future payments.
repayment value.
IAS 39 subdivides financial instruments into four
“Available-for-sale financial assets” are always
categories:
measured at their fair value. In the case of quoted
– financial instruments held for trading,
financial instruments, the fair value corresponds
– held-to-maturity investments,
to the market value on the balance sheet date. This
– loans and receivables originated by the enterprise,
category substantially comprises long-term and
– available-for-sale financial assets.
current securities.
The financial instruments used within the Audi Group
generally shown at their respective cost of purchase,
are generally classified as “available for sale” or
as no active market exists for these companies and no
“loans and receivables originated by the enterprise”.
fair value can reliably be determined with a justifiable
“Financial instruments held for trading” arise where
amount of effort.
Shares in subsidiaries and investments are
external hedging transactions are concluded for relationships involving credit between group companies
1.2 Derivative financial instruments
but are eliminated from the consolidated financial
Derivative financial instruments are used as a hedge
statements. No financial instruments in the category
for items on the balance sheet and for future pay-
of “held-to-maturity investments” are in use. Where
ments.
financial instruments are purchased or sold in
In the case of hedges against the risk of changes
the “customary” manner, they are recognised using
in value of balance sheet items (fair-value hedges),
settlement date accounting.
both the hedging transaction and the hedged risk
Financial instruments are reported at amortised cost or at fair value. The amortised cost of a financial asset or financial
portion of the underlying transaction are recognised at fair value. Changes in fair value are included in the net interest. The carrying value of the hedged under-
liability is the amount at which the financial asset or
lying transaction is simultaneously adjusted and
liability was measured at initial recognition minus
recognised.
principal repayments and any impairment losses. In the case of short-term receivables and liabilities,
As a means of hedging future payments in foreign currency, the Audi Group uses foreign exchange
the amortised cost corresponds to the notional or
contracts (cash flow hedges) and currency option
repayment value.
transactions. These hedging instruments are likewise
The fair value generally corresponds to the market
recognised at fair value. Whereas the fluctuations in
or stock market value. If no active market exists, the
the value of currency option transactions immediately
fair value is determined by means of investment
have an effect on the net profit or loss for the period,
mathematics methods.
the changes in value of cash flow hedges are initially reported in a special reserve with no effect on income and are only recognised as income or expense once the hedged item is due.
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88 89
2 Hedging policy and risk management 2.1 Price and foreign exchange exposure The Audi Group is exposed to price and exchange rate fluctuations in view of its international business activities. These risks are limited by concluding appropriate hedging transactions for matching amounts and maturities. The measures to hedge against foreign exchange exposure are coordinated regularly between AUDI AG and the group treasury of Volkswagen AG in accordance with the Volkswagen organisation’s guidelines. Marketable derivative financial instruments (foreign exchange contracts and currency option transactions) are used for this purpose. The hedging transactions are performed centrally on behalf of Audi by Volkswagen AG on the basis of an agency agreement. Contracts are concluded exclusively with top-grade national and international banks whose creditworthiness is regularly examined by leading rating agencies. The results from foreign exchange hedging are credited or charged to the Audi Group each month on the basis of the proportion of the Volkswagen Group’s overall hedging volume. In accordance with the Volkswagen organisational guideline, AUDI AG moreover concludes hedging transactions of its own to a limited extent, where this helps to simplify current operations. Nominal volume of derivative financial instruments The nominal volumes of the hedging transactions shown represent the total of all buying and selling prices on which the transactions are based: Nominal values
Market values
Time to maturity EUR ‘000 Foreign exchange contracts
Dec. 31, 2003
up to 1 year
Dec. 31, 2002
up to 1 year
Dec. 31, 2003
Dec. 31, 2002
1,541,022
1,498,073
1,521,743
1,518,861
60,337
27,417
633,729
633,729
356,806
356,806
88,062
16,065
62,962
62,962
24,311
24,311
– 777
275
2,237,713
2,194,764
1,902,860
1,899,978
147,622
43,757
Currency option transactions Currency swaps Total portfolio
Hedging measures in 2003 related principally to the US dollar and the pound sterling.
Consolidated Financial Statements
2.2 Market risk
3 Contingencies
A market risk exists if price changes on financial markets have a negative influence on the value of
Contingencies are unrecognised contingent liabilities,
financial instruments. The market values shown in the
the amount of which corresponds to the maximum
table have been calculated on the basis of the market
possible claim at the balance sheet date.
information available at the balance sheet date and represent the redemption (cash-in) values of the
EUR ‘000
derivative financial instruments. The redemption
Liabilities from guarantees
values are calculated on the basis of quoted prices or
Furnishing of collateral
standardised methods.
for outside liabilities
Dec. 31, 2003
Dec. 31, 2002
3,431
20
2,175
2,584
Liabilities from guarantee
2.3 Interest rate risk
bonds
An interest rate risk, in other words potential fluctua-
950
0
6,556
2,604
tions in the value of financial instruments as a result of changes to market rates, can occur above all in the case of medium and long-term fixed-interest receiv-
4 Litigation settlements
ables or liabilities. Fixed-interest loans totalled EUR 3 million (EUR 3
Neither AUDI AG nor any of its group companies are
million) on December 31, 2003. In view of the low
involved in ongoing or prospective legal or arbitration
volume of these financial instruments, no interest-
proceedings which could have a significant influence
rate hedging contracts were taken out.
on their economic position or have had such an influence during the past two years. Appropriate provi-
2.4 Liquidity risk
sions have been created within each group company,
A liquidity forecast based on a definite planning
or adequate insurance benefits are anticipated, for
horizon and credit facilities of Volkswagen AG assure
possible financial charges resulting from other legal
the adequate liquidity of the Audi Group at all times.
or arbitrational proceedings.
2.5 Credit risk The credit risk from financial assets consists in the risk of default by a counterparty and therefore does not exceed the positive fair values from the contracting party. We work on the assumption that the actual risk from underlying primary financial instruments cover the estimated uncollectable portion of accounts receivable. The credit risk from derivative financial instruments does not exceed the balance of positive market values in the event of default by a counterparty of Volkswagen AG or the Audi Group companies. The actual credit risk is negligible, as Volkswagen AG and AUDI AG only conclude contracts with top-class business partners and trading limits are defined for each business partner as a risk management measure.
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90 91
5 Other financial obligations Dec. 31, 2003
Dec. 31, 2002
Due within
Due in
Due in
1year
1 – 5 years
over 5 years
617
412
–
1,029
368
920
56
3
–
59
16
129
agreements
20
22
4
46
22
42
agreed loans
36
–
–
36
–
36
729
437
4
1,170
406
1,127
EUR million
Total
Due in
Total
over 1 year
Ordering commitments for property, plant and equipment intangible assets Commitments from long-term rental and lease
The commitments from rental and lease agreements relate exclusively to rental agreements in which the companies of the Audi Group do not have an economic interest in the rented assets according to the criteria of IAS 17. 6 Discontinuing operations There are no plans to discontinue operations as defined by IAS 35. 7 Cost of materials EUR ‘000
2003
2002
as purchased goods
15,817,873
15,480,414
Purchased services
1,344,806
1,245,322
17,162,679
16,725,736
Raw materials and consumables used as well
8 Personnel costs EUR ‘000 Wages and salaries
2003
2002
2,390,670
2,271,867
547,450
467,040
Social insurance and expenses for retirement benefits and maintenance payments of which in respect of retirement benefits
79,010
67,936
2,938,120
2,738,907
Consolidated Financial Statements
9 Total average employees for the year
Members of the Board of Management or Supervisory Board of AUDI AG also belong to the supervi-
Domestic group companies Foreign group companies Total of which apprentices
2003
2002
45,316
44,261
7,373
6,937
52,689
51,198
1,844
1,733
sory or management boards of other companies with which the Audi Group maintains business relations. All transactions with such companies are likewise conducted according to the terms that customarily apply to outside third parties. Cash management within the Audi Group is centralised at AUDI AG. The group companies invest their
10 Related party disclosures
liquid funds with AUDI AG or raise liquid funds from it. Residual amounts are equalised via the cash pool
Related parties as defined in IAS 24 are:
of Volkswagen AG. All transactions are handled on
– Volkswagen AG,
market terms.
– companies which are controlled directly or indirectly by AUDI AG but are not consolidated, – other consolidated and non-consolidated affiliated companies in the Volkswagen Group which supply goods and services to or purchase goods and services from companies of the Audi Group in the context of their business purpose, – members of the Board of Management or Supervisory Board, – companies in which a substantial interest in the voting power is held by Volkswagen AG or by members of its management. All business with related parties has been conducted on the basis of international comparable uncontrolled price methods pursuant to IAS 24, according to the terms that customarily apply to outside third parties. The goods and services procured from related parties include primarily supplies for production, as well as development, transport, financial and distribution services and, to a lesser extent, design, training and other services and supplies of original parts. Business from related companies comprises for the most part sales of new and used cars, engines and components.
|
92 93
Segment reporting
The principal activities of AUDI AG, quattro GmbH and the Lamborghini Group are the development,
The Audi Group is structured along the lines of
production, assembly and sale of cars and engines.
the regional locations of its assets, into the following
AUDI HUNGARIA MOTOR Kft. manufactures engines
segments: Germany (AUDI AG, Audi Vertriebsbe-
and cars. COSWORTH TECHNOLOGY LIMITED devel-
treuungsgesellschaft mbH, Audi Zentrum Hannover
ops, manufactures and assembles engines and vehi-
GmbH, Audi Synko GmbH, quattro GmbH), rest of
cle components. AUTOGERMA S.p.A. imports and
Europe (AUDI HUNGARIA MOTOR Kft., COSWORTH
sells models of the Audi, SEAT, Škoda, Volkswagen
TECHNOLOGY LIMITED, the Lamborghini Group
Commercial Vehicles and Volkswagen Passenger Cars
comprising the companies Automobili Lamborghini
brands as well as original parts. AUDI DO BRASIL E
Holding S.p.A., Automobili Lamborghini S.p.A.,
CIA. holds a dormant equity holding in the Curitiba
Motori Marini Lamborghini S.p.A., Lamborghini
Business Unit. AUDI SENNA Ltda. sells Audi vehicles
ArtiMarca S.p.A. and AUTOGERMA S.p.A.), and rest of
in Brazil. Audi Japan K.K. and Audi Australia Pty. Ltd.
world (Audi Australia Pty. Ltd., AUDI DO BRASIL E CIA.,
sell Audi vehicles in their respective markets. Audi
Audi Japan K.K., AUDI SENNA Ltda.).
Vertriebsbetreuungsgesellschaft mbH supports the
The subdivision of the group into three segments
German Audi sales organisation. Audi Synko GmbH
on the basis of the locations of assets reflects the
secures locations for Audi dealerships.
arrangements for internal group steering and report-
Transactions between the segments are conducted
ing.
on generally accepted market terms, in the way that is customary for transactions with outside third parties.
External revenue EUR million Germany Rest of Europe Rest of world Consolidation measures Audi Group
Internal revenue 2002
2003
2002
2003
2002
16,641
16,532
2,197
1,800
18,838
18,332
6,189
6,037
2,304
2,489
8,493
8,526
576
34
0
0
576
34
–
0
– 4,501
– 4,289
– 4,501
– 4,289
23,406
22,603
0
0
23,406
22,603
Profit before tax EUR million
Total revenue
2003
Segment assets
Segment liabilities
2003
2002
Dec. 31, 2003
Dec. 31, 2002
Dec. 31, 2003
Dec. 31, 2002
Germany
735
868
12,178
11,620
7,582
6,821
Rest of Europe
362
377
4,307
3,692
1,616
1,304
7
13
379
129
243
4
4
–4
– 2,894
– 2,791
– 1,618
– 1,122
1,108
1,254
13,970
12,650
7,823
7,007
Rest of world Consolidation measures Audi Group
Consolidated Financial Statements
Investments in
Investments in
intangible assets, property,
financial assets
plant and equipment EUR million
2003
2002
2003
2002
Germany
1,679
2,035
15
7
395
368
0
0
2
0
–
–
Rest of Europe Rest of world Consolidation measures Audi Group
–
–
–
–
2,076
2,403
15
7
Depreciation
Other non-cash expenses
EUR million
2003
2002
2003
2002
Germany
1,628
1,418
996
1,043
241
224
302
322
Rest of Europe Rest of world
0
0
17
0
Consolidation measures
2
–1
– 365
– 130
1,871
1,641
950
1,235
Audi Group
Pursuant to IAS 14.71, revenue is broken down according to the geographical locations of customers. Revenue 2003 share
2002 share
EUR million
%
EUR million
%
7,399
31.6
6,974
30.9
Rest of Europe
11,252
48.1
11,248
49.7
North America
2,509
10.7
2,866
12.7
Asia/Oceania
2,010
8.6
1,205
5.3
98
0.4
153
0.7
Germany
South America Africa Total
138
0.6
157
0.7
23,406
100.0
22,603
100.0
|
94 95
German Corporate Governance Code
Stock options serve as variable remuneration components providing a long-term incentive. These
The Board of Management and Supervisory Board
options are based on the performance of Volkswagen
of AUDI AG submitted the declaration pursuant to
ordinary shares. In the context of the fifth tranche of
Section 161 of German Stock Corporation Law on
the stock options plan, in the 2003 financial year each
the “German Corporate Governance Code” on De-
member of the Board of Management was able to
cember 9, 2003 and made it accessible on the
subscribe to up to 500 non-transferrable convertible
website www.audi.com/cgk-declaration.
bonds at a price of EUR 2.56 each, entitling the holder to up to 5,000 Volkswagen ordinary shares. A condition of participation in this stock options plan was the
Details of the Supervisory Board and Board of
contribution of between EUR 5,000 and 25,000 in time
Management
bonds, depending on the number of convertible bonds being acquired.
The remuneration of members of the Board of Man-
The structure of the stock options plan is essen-
agement complies with the legal requirements of Ger-
tially as follows: the basis for determining the conver-
man Stock Corporation Law as well as the recommen-
sion price (basic conversion price) of a tranche is the
dations and most of the suggestions of the “German
average Xetra closing prices of Volkswagen ordinary
Corporate Governance Code”. The overall remunera-
shares on the five trading days preceding each deci-
tion is made up of fixed and variable components.
sion to issue convertible bonds. Conversion may take
The remuneration of members of the Board of
place for the first time after a qualifying period of
Management for the 2003 financial year amounted to
24 months and then up until a period of 5 years from
EUR 5,393 thousand (previous year: EUR 5,673 thou-
the time of issue of the convertible bonds has elapsed.
sand), of which variable components accounted for
The conversion price is initially 110 percent of the
EUR 3,199 thousand.
basic conversion price, rising by five percentage
The fixed components assure a basic remuneration
points in each subsequent year. The Board of Man-
that enables the board member to execute his duties
agement may exercise its conversion rights only three
conscientiously and in the best interests of the
times a year, during eight-week exercise periods,
companies, without becoming dependent upon the
each of which commences on a public reporting date
attainment of short-term targets. Conversely, variable
of Volkswagen AG. The stock options plan is thus cen-
and other components that are dependent on the
tred on demanding, relevant comparative parameters
economic reality of the company reconcile the inter-
in the spirit of the German Corporate Governance
ests of the Board of Management with those of the
Code. Further details are given in the Agenda to the
other stakeholders. The fixed remuneration compo-
Annual General Meeting of Volkswagen AG on
nents for the members of the Board of Management
April 16, 2002, at which authorisation to introduce
totalled EUR 2,194 thousand in the 2003 financial
the stock options plan was granted.
year.
The purpose of the stock options plan’s structure
As well as fixed payments in cash, there are
is to grant the Board of Management a remuneration
varying levels of contributions in kind, including in
component that is based on appreciation in the com-
particular the use of company cars.
pany’s share price. It is thus intended to contribute
Every member of the Board of Management is paid
towards increasing added value and towards enhanc-
a variable annual gratuity. The variable gratuity com-
ing the enterprise value. The stock options plan is in
prises components recurring annually that are tied to
addition a widely used instrument of recruiting and
the economic success of the company. It is largely
retaining board members.
based on the earnings achieved by the company and its economic situation. The inclusion of one-off variable components based on business success in the Board of Manage-
The retrospective adjustment of the stock option plan’s performance targets or comparative parameters is excluded. Inappropriate inflows from the stock options are
ment’s remuneration is currently being openly
not to be expected due to the link with the share price
discussed in depth in specialist quarters. Instead of
performance of Volkswagen ordinary shares and
this suggestion being implemented now by AUDI AG,
the restricted number of options per tranche. In order
the outcome of the discussion is to be awaited.
to implement the recommendation of the German
Consolidated Financial Statements
Corporate Governance Code, the Supervisory Board is
Supervisory Board 1
prepared to come to an agreement with the members
Position at December 31, 2003
of the Board of Management on a cap in the event of exceptional, unforeseen developments. In the context of the fifth tranche of the stock options plan, the members of the Board of Manage-
Dr.-Ing. e.h.
Chairman 2
Bernd Pischetsrieder
Shareholders’ representative
Xaver Meier
Deputy Chairman 2, 3
ment of AUDI AG subscribed to a total of 2,200 of
Employees’ representative
the aforementioned convertible bonds in the 2003
Dr. rer. pol. h.c.
financial year. At December 31, 2003 the members of
Bruno Adelt
the Board of Management were entitled to purchase
Senator h.c.
a total of 125,000 ordinary shares of Volkswagen AG in
Helmut Aurenz
the event of the conditions of conversion being met.
Joachim Dilger
Employees’ representative
The value of these stock options totalled EUR 331
Heinz Eyer
Employees’ representative
thousand on December 31, 2003.
Dr. rer. pol.
In certain circumstances, members of the Board of
Shareholders’ representative 2 Shareholders’ representative
Thomas R. Fischer
Shareholders’ representative
Management are entitled to retirement benefits and
Wolfgang Förster
Employees’ representative
a disability pension.
Dr. rer. pol. h.c.
The provisions for pensions for current members
Peter Hartz
Shareholders’ representative
of the Board of Management totalled EUR 3,932 thou-
Dr. jur. Claus Helbig
Shareholders’ representative
sand (EUR 8.740 thousand) on December 31, 2003.
Johann Horn
Employees’ representative
Berthold Huber
Employees’ representative 2
and their surviving dependents received payments
Peter Mosch
Employees’ representative
totalling EUR 1,255 thousand (EUR 875 thousand).
Dr. jur. Jens Neumann
Shareholders’ representative 3
The provisions for pensions for this group of persons
Dr.-Ing.
amounts to EUR 15,308 thousand (EUR 14,395 thou-
Franz-Josef Paefgen
sand).
Richard Polzmacher
Employees’ representative
Hans Dieter Pötsch
Shareholders’ representative 3, 4
together with their membership of other supervisory
Norbert Rank
Employees’ representative 3
boards and regulatory bodies – pursuant to Sections
Dr. rer. pol. Axel
285 Sentence 1, No. 10 of the German Commercial
Freiherr von Ruedorffer
Shareholders’ representative
Code and 125 Para. 1, Sentence 3 of German Stock
Max Wäcker
Employees’ representative
Corporation Law – are indicated in the Notes to the
Dr. rer. pol. Carl H. Hahn
Honorary Chairman
Financial Statements of AUDI AG.
1
Former members of the Board of Management
The members of the Board of Management,
The remuneration of the Supervisory Board of AUDI AG amounted to EUR 404 thousand (EUR 149 thousand), of which were EUR 161 thousand fixed remuneration components and EUR 243 thousand
2 3 4
Shareholders’ representative
The profession and company of the members of the Supervisory Board, together with other non-executive directorships, are indicated in the Notes to the Financial Statements of AUDI AG. Member of the presiding committee and the negotiating committee Member of the Audit Committee Chairman of the Audit Committee
variable remuneration components. The level of the variable remuneration components is based on the dividend paid for the 2003 financial year in accordance with the provision in the Articles of Incorporation applicable at the time.
|
96 97
Events occurring after the balance sheet date No events which must be reported according to IAS 10 occurred after December 31, 2003.
Ingolstadt, February 4, 2004 The Board of Management
Statement of interests held by the Audi Group at December 31, 2003
Principal group companies Name and registered office
Capital share in %
AUDI AG, Ingolstadt AUDI DO BRASIL E CIA., Curitiba (Brazil)
100.00
AUDI HUNGARIA MOTOR Kft., Györ (Hungary)
100.00
Audi Japan K.K., Tokyo (Japan)
100.00
Audi Synko GmbH, Ingolstadt
100.00
Audi Zentrum Hannover GmbH, Hanover Audi Vertriebsbetreuungsgesellschaft mbH, Ingolstadt Automobili Lamborghini Holding S.p.A., Sant’Agata Bolognese (Italy)
100.00 100.00 100.00
AUTOGERMA S.p.A., Verona (Italy)
100.00
Automobili Lamborghini S.p.A., Sant’Agata Bolognese (Italy)
100.00
Motori Marini Lamborghini S.p.A., Sant’Agata Bolognese (Italy)
100.00
Lamborghini ArtiMarca S.p.A., Sant’Agata Bolognese (Italy)
100.00
COSWORTH TECHNOLOGY LIMITED, Northampton (Great Britain)
100.00
quattro GmbH, Neckarsulm
100.00
AUDI SENNA Ltda., São Paulo (Brazil)
51.00
Audi Australia Pty. Ltd., Homebush Bay (Australia)
50.00
YANASE Audi Sales Company Ltd., Tokyo (Japan)
33.40
FAW-Volkswagen Automotive Company, Ltd., Changchun (China)
10.00
|
98 99
Glossary
adaptive air suspension
combustion chamber. The permanently high pressure,
adaptive air suspension is an electronically controlled
which reaches 1,600 bar in the second-generation
air suspension system which enhances suspension
common rail, ensures that the fuel is very finely
comfort at all four wheels by means of a continuously
atomised, thus enhancing the efficiency of the com-
variable damper system. It serves as a basis for
bustion process. The injectors’ electronic control
lowering the body’s ride height depending on road
permits a flexible injection process comprising pilot,
speed, producing superior directional stability.
main and secondary injection; this reduces engine noise and emissions and improves torque.
adaptive light The adaptive light system involves an auxiliary
Direct Shift Gearbox (DSG)
headlight, incorporated into the headlight unit, which
The DSG combines the advantages of a conventional
helps the driver to see around corners. It comes on
six-speed manual gearbox with the qualities of a
automatically when the turn indicator is operated or if
modern automatic. The driver benefits from enor-
the driver turns the steering wheel by any significant
mous agility and acceleration, without any interrup-
degree.
tion in the power flow. The basis is a three-shaft six-speed manual gearbox with twin multi-plate
anti-lock brake system (ABS)
clutch. Thanks to electro-hydraulic control, two gears
ABS prevents the wheels from locking up during
can be engaged simultaneously. While one gear is
braking. The car consequently remains steerable and
engaged, the next appropriate gear is pre-selected
controllable even when the brakes are applied hard.
when the gearshift point is approached, but its clutch
This can help the driver to avoid an obstacle without
kept disengaged. The gearshift process opens
having to release the brakes first. When ABS is acti-
the clutch of the activated gear and closes the other
vated, the driver will notice a slight pulsation of the
clutch at the same time with a certain overlap. The
brake pedal. The anti-lock brake system is optimised
gear change takes place under load which means that
with electronic brake-force distribution (EBD).
a permanent flow of power is maintained.
Audi Space Frame® (ASF)
dual-rate brake system
The ASF is a high-strength aluminium frame structure
Audi A3 and Audi S4 models have a brake system
on which each planar component is integrated as
with dual-rate brake servo. This means that braking
part of the structure. This results in extremely high
force can be controlled sensitively when a low to
rigidity, better-than-average crash protection and
medium rate of deceleration is required. When the
a significant reduction in vehicle weight.
driver applies the brakes in an emergency, however, the brake servo switches to a higher assistance
biturbo
factor above a defined deceleration speed in order to
The suffix “biturbo” for Audi V-engines indicates that
bring the vehicle safely to a halt.
there are two exhaust-driven turbochargers, one for each cylinder bank. The driver benefits from increased
Dynamic Ride Control (DRC)
low-end torque, more output at higher engine speeds
The suspension concept DRC was introduced for the
and greater responsiveness of the engine.
first time on the Audi RS 6. DRC consists of a special damping system that counteracts rolling and pitching
common rail fuel injection system
movements of the vehicle body without the use of
Common rail systems, which Audi uses on the eight-
electronics. The diagonally opposed shock absorbers
cylinder 4.0 TDI and six-cylinder 3.0 TDI, incorporate a
are connected hydraulically. When steering into and
high-pressure pump that delivers the fuel to a rail
around a corner, the damper characteristic is varied
serving all cylinders. Feeder lines from this rail supply
by a central valve in such a way that movements
the injectors, which inject the fuel directly into the
around the longitudinal axis (rolling) are significantly reduced. DRC counteracts vehicle movements around the transverse axis (pitching) when accelerating or braking according to the same principle.
electromechanical parking brake
LED technology
The electromechanical parking brake is resistant to
Light-emitting diodes (LED) have a whole series
wear, its braking effect is permanently constant and it
of technical advantages over conventional bulbs.
cannot lock. It is activated by pulling the small brake
The light-emitting diodes last an entire vehicle life,
lever on the centre console, which replaces the
consume up to 50 percent less energy and take
conventional handbrake lever. When driving off, the
up less space. The A8 uses light-emitting diodes for
parking brake is released automatically as soon as the
all main rear light functions (tail lights, brake lights,
driver has fastened his or her seat belt. The integral
turn indicators) and for the side turn indicators.
starting assist function prevents the car from rolling
Thanks to the development of high-performance LEDs
back on uphill gradients.
with white light, it is now possible to use LED headlights. The Audi A8 L 6.0 quattro is the first car in the
electronic brake-force distribution (EBD)
world to be equipped with LED daytime driving lights.
EBD ensures that the braking performance is distributed between the front and rear wheels in accordance
Multi Media Interface (MMI)
with the condition of the road surface. It also reduces
MMI is an integrated operating module that enables
the load on the front brakes and helps to reduce
vehicle and infotainment components to be operated
their temperature. This counteracts brake fade as a
intuitively and according to a simple logical principle.
result of excessive thermal loads. EBD optimises the
The MMI consists essentially of two elements: the
anti-lock brake system (ABS).
MMI terminal in the centre console and the MMI display, a retractable 7-inch colour monitor. The central
electronic stabilisation program (ESP)
element of the MMI terminal is a combined rotary
ESP makes the vehicle easier to control in handling
control/pushbutton with four control keys arranged
situations close to the limit. It reduces the danger of
around it, with the aid of which the user can navigate
swerving and thus improves directional stability. ESP
through all menus and make the desired selection.
identifies the car’s intended direction and response. It applies the brakes on individual wheels, thereby
multitronic®
generating one-sided forces that help to keep the car
multitronic is a continuously variable transmission.
moving in the desired direction. The program uses
The power is transmitted at a torque of up to
the anti-lock braking, electronic brake-force distribu-
310 Newton-metres via a steel link-plate chain, for
tion, electronic differential lock and anti-slip regula-
jolt-free, forceful acceleration. In the manual mode,
tion systems and is permanently active.
six simulated drive positions can be selected. In the automatic mode, the dynamic control program
FSI®
(DRP) calculates the optimum transmission ratio for
FSI technology increases the torque and output of
the driver and driving situation, based on load.
spark-ignition engines, makes them up to 15 percent more economical and paves the way for lower exhaust
quattro®
emissions. In contrast to conventional spark-ignition
quattro permanent four-wheel drive enjoys a lengthy
engines, FSI technology involves injecting the fuel
tradition of more than 20 years. This four-wheel-drive
directly into the combustion chamber. No throttle
principle involves distributing the engine’s power
valve is now necessary. This dethrottles the engine,
permanently and according to demand to all four
reduces thermal losses and thus permits both
wheels. It provides high active safety, reliable traction
increased power output and lower fuel consumption.
on virtually all surfaces and optimum directional stability at all times, even in cross-winds and is easily superior to driver-operated four-wheel-drive systems because its safety benefits are permanently “on standby”.
|
100 101
Glossary
servotronic
xenon plus
With servotronic, Audi offers a speed-dependent form
The xenon plus system offers all the benefits of xenon
of power steering that is more convenient for the
headlights – better illumination of the road ahead
driver. The amount of power assistance is greatest at
and consequently greater active safety when driving
low speeds, for example when manoeuvring or park-
after dark – for the main beams as well. When the
ing the car, which can thus be handled with minimal
driver switches to high beam or back to low beam, an
effort. At higher speeds, an electronic sensing system
electromagnet is energised. Depending on the reflec-
gradually reduces the level of power assistance. In
tor type, this either repositions a gate in unison with
this way, the driver can control the car at high speed
the ellipsoidal reflector, or pivots the xenon arc
and keep it on the chosen line even more accurately
assembly. The large amount of light produced by the
than with conventional power steering.
xenon arc permits dispersion of the high beam and combines a very large range with very broad lateral
space floor concept
illumination. The additional halogen high-beam
The space floor concept in the Audi A2 optimises
spotlight serves as a headlight flasher and further
space and comfort in the interior because it allows
optimises the beam’s throw.
rear passengers to adopt an ergonomically correct, relaxed seated position. By lowering the rear foot-
4-level air suspension
wells, the rear passengers’ legs are bent at a natural
4-level air suspension for the front and rear axles is a
angle, for a comfortable and relaxed position.
standard technical feature of the Audi allroad quattro. With ground clearance of up to 208 mm and in con-
TDI®
junction with the standard feature of quattro drive,
Audi has many years of experience with TDI technol-
this vehicle is also capable of tackling difficult terrain.
ogy, an area in which it has been one of the pioneers
The ground clearance can be adjusted manually or
since 1989. At Audi, TDI denotes diesel models with
automatically to four different height settings,
diesel direct injection. The characteristics of TDI
covering a total range of 66 mm. An automatic mode
engines are economy, low emissions, high traction
regulates the ride height in line with road speed.
and an excellent power yield. tiptronic tiptronic is a special form of transmission which
For further technical explanations and informative
unites the convenience of an automatic transmission
diagrams, see www.audi.com/glossary.
with the driving enjoyment and dynamic response of a manual gearbox. The driver can switch from the automatic mode to one-touch gearshifts at any time while on the move. Gearshifts take place with uninterrupted traction in both transmission modes. turbocharger The operating principle is as follows: a turbine uses the energy of the exhaust-gas flow to drive a compressor impeller located on the same shaft (but in the fresh-air flow). It compresses the fresh air as it is drawn in and forces it into the cylinders. The engine thus has more oxygen for the combustion process. Power output, torque and efficiency can all be boosted in this way compared with naturally aspirated engines of the same displacement. The main points in favour of turbochargers are the energy saving, lower emissions and greater torque.
Review of 2003
January to March
10-Year Overview 1
April to June
German Commercial Code 1995
1996
1997
1998
1999
2000
2001
2002
2003
Cars
352,589
446,808
491,501
557,777
619,030
626,059
650,850
727,033
735,913
761,582
Engines
544,538
607,175
620,603
763,928
1,241,351
1,266,896
1,187,666
1,225,448
1,284,488
1,342,883
Vehicle sales
Cars
376,180
447,855
492,046
546,436
599,509
634,973
919,621
991,444
995,531
1,003,791
Audi
Cars
376,180
447,855
492,046
546,436
599,509
634,708
653,404
726,134
742,128
769,893
Cars
160,803
204,138
217,858
238,735
244,127
257,686
239,644
254,866
243,650
237,786
Outside Germany
Cars
215,377
243,717
274,188
307,701
355,382
377,287
413,760
471,268
498,478
532,107
Outside Germany
Percent
57.3
54.4
55.7
56.3
59.3
59.4
63.3
64.9
67.2
69.1
Market share, Germany
Percent
5.2
6.2
6.1
6.8
6.5
6.8
6.9
7.5
7.4
7.4
Lamborghini
Cars
–
–
–
–
–
265
296
297
424
1,305
Other Volkswagen Group brands
Cars
–
–
–
–
–
–
265,921
265,013
252,979
232,593
Production 2 Audi Pikes Peak quattro – debut in Detroit The Pikes Peak quattro provides a glimpse of the shape of things to come at Audi when it appears at the Detroit Auto Show in January. The response to this crossover model is so positive that the decision is taken at the end of 2003 to build it as a production model. Audi tops reader polls The Audi TT is voted “Coupé of the Year” for the fifth time by readers of the renowned British publication “What Car”. The new Audi A4 1.9 TDI is acknowledged as the “Best Compact Executive Saloon”. The readers of “auto motor und sport” vote the Audi A4 and the Audi A8 the “Best Cars in their Class” and the Audi allroad quattro as the “Best Crossover of 2003”.
World Ski Championships 2003 presented by Audi Audi accompanies skiing enthusiasts worldwide through the winter. In addition to sponsoring the Alpine Ski World Cup, Audi is involved in the Alpine World Ski Championships in St. Moritz. Flood victims aided by Audi The victims of the catastrophic floods in summer 2002 receive financial assistance from Audi. AUDI AG employees had donated generously, with the company matching every euro contributed by the workforce. In March 2003, it is consequently possible to hand over half a million euros to a total of 32 charities and municipal bodies.
Geneva: presentation of the new A3 The new Audi A3 makes its debut at the Geneva Motor Show. The new compact Audi has everything it needs to repeat the unique success story of the previous A3 model. The presentation of the “small” Lamborghini Gallardo and the unveiling of the Audi Nuvolari quattro study, a 441 kW (600 bhp) high-performance Gran Turismo also causes a stir. Audi reports record figures Chairman of the Board of Management Dr. Martin Winterkorn announces the annual financial statements for 2002 to around 200 journalists at the Annual Press Conference at the Audi Forum Ingolstadt. The Audi Group once again reports record figures for revenue and vehicle sales.
July to September
10 years of Audi Hungaria AUDI HUNGARIA MOTOR Kft. celebrates its tenth anniversary. The company is the central engine supplier of the Audi Group and has been Hungary’s largest exporter for many years. The Hungarian Prime Minister Péter Medgyessy pays tribute to the achievements of Audi’s Hungarian subsidiary at the official celebrations. 10 years of Audi Toolmaking The Toolmaking Division of AUDI AG also celebrates ten years of operations. It is regarded as a pioneer of innovative techniques within the car industry, including aluminium forming technology, and patents have been filed for a great many of its own developments.
100,000th A6 from Changchun Audi reaches a further landmark in China with the production of the 100,000th Audi A6 at the Changchun plant. The long-wheelbase version of the Audi A6, built specifically for the Chinese market, has been in production locally since 1999 and was the first luxury saloon to be built in China. Starter’s orders for the A4 in Changchun Audi further extends its production range in China. A second car line, the Audi A4, goes into local production in China, with Audi once again assuming a pioneering role: the A4 is the first midsize luxury vehicle to be built in China, and is aimed at the growing group of young lifestyle-oriented customers.
Bayern Munich, powered by Audi Bayern Munich receives an end-of-season boost from its automotive sponsor, Audi. The players of the new German champions collect their new Audi cars in Ingolstadt. Bayern Munich are now “powered by Audi” in a very real sense. The Bayern players’ new fleet of cars musters a total of almost 8,000 bhp. Triple victory in the category “Four Wheel Drive of the Year 2003” The new Audi A8 is voted “Best Four Wheel Drive of the Year 2003” by the readers of the motoring magazine “AUTO BILD alles allrad”. In second place is the Audi A6 quattro, with the Audi TT quattro following in third spot. There are a further 31 contenders in the full list.
250,000th aluminium body The 250,000th Audi with aluminium body leaves the production line at Neckarsulm – an A8 4.0 TDI quattro. Audi has been using aluminium in volume production for around ten years now, and has thus set new standards as a pioneer of lightweight design: the A2 and A8 models with their all-aluminium body have collected around 40 awards from internationally renowned institutions and media. Design awards Audi models win three out of twelve categories in the face of competition from 326 candidates from both Germany and other countries in the reader poll “Autonis 2003” staged by the periodical “AUTO Straßenverkehr”. This emphatic decision by nearly 50,000 well-informed readers serves to underline the charisma of Audi’s design philosophy.
October to December
Audi becomes automotive sponsor of Real Madrid Audi and Real Madrid sign an agreement making Audi the exclusive automotive sponsor of the Spanish champions: an ideal partnership between the most famous football club in the world and the leading premium car brand in Spain. Audi and Real Madrid are both able to look back on a history of success stretching back around one century. 40 years under the sign of the bull Uncompromising sportiness, refined aggression and Italian hot-bloodedness – these are the attributes that characterise the exclusive Lamborghini brand. To mark the company’s anniversary, Audi traces the unique history of this super sports car manufacturer in a special exhibition.
Audi A8 keeps IMF moving Audi provides a fleet of 250 Audi A8 cars for the meeting of the World Bank and the International Monetary Fund in Dubai. These saloons are a secure and comfortable means of transport for the top representatives of both organisations and 184 issuing banks. This is the largest fleet of A8 saloons ever to have been in action at an international event. Audi at the 2003 Frankfurt Motor Show Audi’s stand at the 2003 Frankfurt Motor Show features some exciting new exhibits. The real star is the Audi Le Mans quattro, sharing the same genes as the triple Le Mans winner, the Audi R8. The spotlight is also on the Audi S4 Cabriolet and the new A8 3.0 TDI with piezo injection system.
INI.TUM gets the go-ahead INI.TUM denotes the Ingolstadt-based institutes of the Technical University of Munich. The new centre for application-based research in the field of vehicle and information technology is launched by AUDI AG, the Technical University of Munich and the city of Ingolstadt. All participating parties stand to benefit from the project: from the university’s point of view, it represents an important component of its regionalisation policy. From Audi’s point of view, the PhD students perform valuable research work and ensure that Audi will continue to live up to its claim of “Vorsprung durch Technik” in the future. One-millionth A3 built A further landmark is reached in the success story of the Audi A3: the onemillionth specimen of this successful car line leaves the production line; the new A3 already accounts for 120,000 of the total.
DSV athletes teaming up with Audi It is announced that top skiers, coaches and officials of the German Ski Federation are to be provided with vehicles for the 2003/2004 winter season. World Champion and overall World Cup winner Ronny Ackermann is thrilled: “However deep the snow is, I know that quattro drive will get me safely to my destination.” The same applies to trips to the Audi wind tunnel, where athletes strive to find the aerodynamically optimum position and test new materials with the aid of Audi’s technicians. Concept Design Munich opened The revamped Audi design studio is opened in Munich’s Schwabing quarter. Designers, engineers and trend specialists develop futuristic visions for the Audi brand group here. Concept Design Munich in particular sees its role as providing intellectual guidance and pushing back the frontiers of creativity.
More triumphs for the Audi R8 Audi wins the American Le Mans Series for the fourth time in succession. The Audi customer teams Infineon Joest and ADT Champion Racing add to the Audi R8’s string of victories in the 2003 season. Frank Biela and Marco Werner (Infineon Team Joest) win the drivers’ standings ahead of JJ Lehto and Johnny Herbert (Team ADT Champion Racing).
Germany
Employees
Average
32,215
32,823
34,529
37,761
41,011
45,800
49,396
51,141
51,198
52,689
Revenue
EUR million
6,880
8,527
9,616
11,458
13,918
15,146
19,952
22,032
22,603
23,406
Cost of materials
EUR million
4,457
5,620
6,365
7,568
9,578
10,155
14,539
15,860
16,726
17,163
Personnel costs
EUR million
1,342
1,553
1,663
1,973
2,111
2,291
2,542
2,660
2,739
2,938
EUR
41,660
47,311
48,173
52,251
51,485
50,022
51,456
52,018
53,496
55,763
Depreciation
EUR million
467
529
455
556
885
945
1,199
1,435
1,641
1,871
Profit before tax
EUR million
96
301
441
569
861
839
986
1,322
1,254
1,108
Net profit
EUR million
11
57
154
188
237
324
734
769
774
816
Share price (year-end price) 3
EUR
24.03
24.29
48.06
70.81
75.16
61.20
59.59
160.00
191.00
225.00
Compensatory payment
EUR
0.15
0.31
0.46
0.61
0.77
0.77
1.20
1.30
1.30
Added value
EUR million
1,464
1,882
2,157
2,606
3,039
3,198
3,600
3,914
4,023
4,292
Capital investments
EUR million
769
442
739
1,006
1,620
1,516
2,422
2,151
2,410
2,094
Cash flow 5
EUR million
624
907
765
1,020
1,213
1,163
2,094
2,452
2,503
2,9256
Fixed assets
EUR million
1,835
1,714
1,978
2,412
3,126
3,679
6,988
7,624
8,238
8,471
Current assets
EUR million
1,787
2,562
2,914
3,182
3,359
3,024
3,379
3,631
4,548
5,742
Equity
EUR million
910
926
1,014
1,109
1,231
1,441
3,817
4,342
4,940
5,658
Liabilities
EUR million
2,712
3,349
3,878
4,485
5,254
5,262
6,551
6,913
7,847
8,555
Balance sheet total
EUR million
3,622
4,275
4,892
5,594
6,485
6,703
10,368
11,256
12,787
14,213
Personnel costs per employee
1
2
Awards for the Audi A8 Readers of the motoring magazine “Auto Zeitung” award the Audi A8 the “Auto Trophy 2003” in the category “Luxury Class Overall”. The international trade world is likewise outspoken in its praise of the A8: “The Audi A8 is clearly the best in its class and a technological standard-bearer that will have an enduring impact on alternative lightweight concepts,” emphasises Fritz Ebert, President of the Automotive Circle International, at the presentation of the “EuroCarBody Award 2003”, the most celebrated European innovation prize for body manufacturing.
IAS
1994
3
4 5 6
Figures for 2001 calculated for the first time according to the International Accounting Standards (IAS); figures for the 2000 financial year reconciled with IAS for purposes of comparison Excluding 2,021 (1994) and 875 (1995) Avant RS2 Figures for 1994 –1998 adjusted at ratio of 1:10 following introduction of individual share certificates; year-end price on Munich Stock Exchange In accordance with the resolution to be passed by the Annual General Meeting of Volkswagen AG on April 22, 2004 In IAS: cash flow from operating activities New method of reporting cash flow from operating activities from 2003; the figure for 2002 has been adjusted
|
102 103
X4
2003 Annual Report
Vorsprung durch Technik www.audi.com
2004 Financial Calendar
Annual Press Conference February 25, 2004 Customer Centre at Audi Forum Ingolstadt Annual General Meeting May 12, 2004 Customer Centre at Audi Forum Ingolstadt Interim Report August 3, 2004
Audi Group Key Figures
Production
Vehicle sales
Dec. 31, 2003
Dec. 31, 2002
Change in %
Cars
761,582
735,913
3.5
Engines
1,342,883
1,284,488
4.5
Cars
1,003,791
995,531
0.8
769,893
742,128
3.7
Audi Germany
237,786
243,650
– 2.4
Outside Germany
532,107
498,478
6.7
Lamborghini
1,305
424
207.8
232,593
252,979
– 8.1
Average
52,689
51,198
2.9
Revenue
EUR million
23,406
22,603
3.6
Profit before tax
EUR million
1,108
1,254
– 11.6
Net profit
EUR million
816
774
5.4
Percent
4.7
5.6
EUR million
2,094
2,410
– 13.1
636
834
– 23.7
EUR million
1,871
1,641
14.0
operating activities
EUR million
2,9251
2,503
16.9
Balance sheet total
EUR million
14,213
12,787
11.2
Percent
39.8
38.6
Other Volkswagen Group brands
This booklet provides an overview of the Audi model range. If this pocket is empty, please contact the Finance Analysis and Publications Department:
Road Book of Emotions
Phone +49 (0)8 4189-4 03 00
Employees
Rate of return before tax Capital investments
AUDI AG Finance Analysis and Publications I/FF-12 85045 Ingolstadt Germany Phone +49 (0)8 41 89-4 03 00 Fax +49 (0)8 41 89-3 09 00
2003 Annual Report
Capitalised development costs Depreciation Cash flow from
Equity ratio 1
New method of reporting cash flow from operating activities from 2003; the figure for 2002 has been adjusted
2003 Annual Report
Vorsprung durch Technik www.audi.com
2004 Financial Calendar
Annual Press Conference February 25, 2004 Customer Centre at Audi Forum Ingolstadt Annual General Meeting May 12, 2004 Customer Centre at Audi Forum Ingolstadt Interim Report August 3, 2004
Audi Group Key Figures
Production
Vehicle sales
Dec. 31, 2003
Dec. 31, 2002
Change in %
Cars
761,582
735,913
3.5
Engines
1,342,883
1,284,488
4.5
Cars
1,003,791
995,531
0.8
769,893
742,128
3.7
Audi Germany
237,786
243,650
– 2.4
Outside Germany
532,107
498,478
6.7
Lamborghini
1,305
424
207.8
232,593
252,979
– 8.1
Average
52,689
51,198
2.9
Revenue
EUR million
23,406
22,603
3.6
Profit before tax
EUR million
1,108
1,254
– 11.6
Net profit
EUR million
816
774
5.4
Percent
4.7
5.6
EUR million
2,094
2,410
– 13.1
636
834
– 23.7
EUR million
1,871
1,641
14.0
operating activities
EUR million
2,9251
2,503
16.9
Balance sheet total
EUR million
14,213
12,787
11.2
Percent
39.8
38.6
Other Volkswagen Group brands
This booklet provides an overview of the Audi model range. If this pocket is empty, please contact the Finance Analysis and Publications Department:
Road Book of Emotions
Phone +49 (0)8 4189-4 03 00
Employees
Rate of return before tax Capital investments
AUDI AG Finance Analysis and Publications I/FF-12 85045 Ingolstadt Germany Phone +49 (0)8 41 89-4 03 00 Fax +49 (0)8 41 89-3 09 00
2003 Annual Report
Capitalised development costs Depreciation Cash flow from
Equity ratio 1
New method of reporting cash flow from operating activities from 2003; the figure for 2002 has been adjusted
