VW scandal driving Audi into electric cars: exec – MarketWatch

Posted: Wednesday, August 31, 2016

Volkswagen AG’s (VOW.XE) diesel-emissions scandal is accelerating the German car maker’s push into electric vehicles for its luxury Audi brand, an Audi AG (NSU.XE) executive said Wednesday.

“It’s clear (sustainable cars) are a megatrend,” said Dietmar Voggenreiter, a board member for sales and marketing at Audi, one of 12 car brands under the Volkswagen umbrella. “Audi wants a leading role in this shift.”

Demand for electric cars, long seen by consumers as niche vehicles, is growing as car buyers look for environmentally friendly automobiles, said Mr. Voggenreiter. While Audi has anticipated this trend for years, Volkswagen’s recently outlined restructuring plan has sped up the car brand’s move into the sector, he said.

As part of the plan to revamp Volkswagen, beleaguered since last year’s disclosure by U.S. authorities that it had rigged diesel engines to cheat on emissions tests, the German company said it would move aggressively into electric vehicles and new technologies. The planned transformation will include the entire Volkswagen portfolio, comprising 12 individual car brands including Volkswagen, Audi and Porsche.

In Hong Kong on Wednesday, Mr. Voggenreiter said a goal set by Audi management this year to generate 25% to 30% of sales from electric cars by 2020 was “achievable.” Audi expects to have three electric car models on the market by that time.

Audi is also focusing on transforming itself from a conventional vehicle manufacturer into a digital car company, and expects its digital initiatives to eventually generate a double-digit percentage of the company’s overall profits, according to Mr. Voggenreiter.

Last year, the company unveiled its Audi at Home premium car-sharing program in San Francisco and Miami, allowing drivers to rent cars for short stints via their mobile devices.

The program, which was expanded this week to Hong Kong, is seeing strong demand, according to Audi, with 90 people in the city signing up in the first two days of launch.

“If you’re selling cars, you’re going to have to have these mobility solutions,” said Mr. Voggenreiter, especially in cities such as Hong Kong, where parking spaces are limited and some consumers might not want to be car owners.

Audi said the car-sharing program would expand to mainland China and other parts of Asia, thought it didn’t have a timetable for the rollout.

In mainland China, Audi expects sales growth of 5% to 10% this year, in line with the market, according to Mr. Voggenreiter.

Audi, which has been losing market share in China to such rivals as BMW AG (BMW.XE) and Daimler AG’s (DAI.XE) Mercedes-Benz, has been trying to court younger consumers there after years of its black sedans being known as the car of choice for government officials.

Write to Kathy Chu at kathy.chu@wsj.com


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