“Software will be our biggest lever for exploiting synergies and innovations in the future.”

How and with which vehicles will Audi shape the future of mobility, what role do sustainability and climate protection play, and how will the new "Vorsprung 2030" strategy lead to success? Markus Duesmann, Chairman of the Board of Management and Member of the Board of Management for Product Lines at AUDI AG, in Interview.

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Markus Duesmann, Chairman of the Board of Management and Member of the Board of Management for Product Lines at AUDI AG (2022)
Markus Duesmann, Chairman of the Board of Management and Member of the Board of Management for Product Lines at AUDI AG

The new strategy describes a far-reaching transformation for the coming years at different levels. How do you plan to achieve this?

 

We now know where we need to focus our strengths and also have enough time to shape the change in an orderly manner. Battery electric mobility is the only way we can efficiently and effectively contribute to the battle against climate change. That’s why technical clarity is so important at this point. It’s equally important that the electricity grids are expanded and charging options developed, for example. The focus for Audi is on continuing to drive the transformation of our product portfolio, the sales structures and our production sites toward e-mobility. New areas of responsibility are thus also emerging for our employees, such as in the field of battery assembly or with expanding the circular economy. We are preparing ourselves for these challenges and investing accordingly in their training.

Digitalization is becoming increasingly important in all areas of life. The car is no exception here. How do you intend to transform Audi vehicles into traveling mobile devices?

 

Software will be our biggest lever for exploiting synergies and innovations in the future. That’s why, as the Volkswagen Group, we have pooled our entire development strength in the software company CARIAD. Joint electronic architectures are being developed here as well as a uniform operating system for all Group brands. Good progress was made in developing CARIAD in 2021. The collaboration between the brands and CARIAD as a strong technology partner has now also been formally and strategically regulated. All attention is now focused on bringing the projects to fruition.

What role does China play as a market?

 

We see enormous potential in the Chinese market, especially in the premium segment and with electric vehicles. We will start selling models from our second partner SAIC Volkswagen in 2022. This will give us a further foothold in the market. At the same time, we are expanding our cooperation with FAW-Volkswagen. Our Chinese customers attach great importance to digital services and, together, we will be able to incorporate their specific needs in the products even more intensively than before. China is also a technology driver in many areas – for example, in the area of automated driving. We are working closely with local partners and authorities and have used test licenses for researching fully automated driving in Beijing and Wuxi for some time now.

Let’s take a look back at 2021: What was really successful and what makes you proud?

 

I am proud of our "Vorsprung 2030” strategy – both in terms of the outcome and because employees at all hierarchical levels were involved in its inception. Thanks to “Vorsprung 2030,” we now have a well-founded transformation plan toward e-mobility and digital business models as well as a clear pathway for the years ahead. I am also impressed at how the entire Audi team pulled together and showed great heart throughout what was also a challenging year in 2021. Firstly in managing the everyday difficulties presented by the pandemic, and secondly in handling the restrictions in the supply of semiconductors. This is the type of spirit and solidarity that we will need in the future, too.

One megatrend is automated driving. How will it change our mobility?

 

For us, automated driving is a key technology with the potential to make traffic safer and mobility more convenient for our customers. At the same time, it offers us the possibility to make mobility accessible to people who cannot currently drive a car themselves owing to physical limitations for instance. That’s why, with CARIAD, we are pushing ahead intensely with the introduction of the technology.

As one of the goals set out in the new “Vorsprung 2030” strategy, you want to increase sales to more than three million models per year by 2030. How do you intend to do that?

 

It is certainly ambitious but also feasible considering market forecasts and our planned product road map. Our “Vorsprung 2030” strategy clearly targets growth – both in terms of quantity and quality. This means that, above all, profitability is critical. Audi has proven that we can generate high returns within our strategic target corridor of between 9 and 11 percent. By stringently implementing our strategy and increasingly exploiting Group synergies, we can achieve a sustained return of more than 11 percent in the long term.

What are you planning for the next 12 months?

 

The path toward “Vorsprung 2030” is clearly defined. Our task as the Audi team is to now implement this plan consistently. We are therefore continuing to work at full tilt on our internal processes, especially in product development, so that we can respond quickly and flexibly to changing demands – to new regulatory requirements and also to fulfill the needs and wishes of our customers.

Strategy "Vorsprung 2030" – How Audi is shaping the future

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Strategy "Vorsprung 2030" – How Audi is shaping the future

“Vorsprung durch Technik” for the electric era

 

The electric mobility offensive of the Four Rings comes at just the right time. Climate-friendly mobility is becoming increasingly important. As of 2027, the company will offer electric models in all core segments. This range of electric cars will stand out from the competition thanks to its distinctive Audi DNA and “Vorsprung durch Technik” in certain areas. Design, sportiness, driving comfort and quality will all make a difference. In addition, Audi will demonstrate its strengths in workmanship, color & trim and acoustics.

 

A clear plan for the last and, at the same time, best combustion-engine vehicle from Audi

 

Audi is accelerating its changeover to electric mobility: As early as 2026, all new models from the Four Rings on the global market will be fully electric. And in 2033, the Four Rings will shut down the production of vehicles with internal combustion engines. One exception could be China, where the company is investigating the possibility of longer production depending on local demand. The last combustion-engine generation comes with a promise: It will be the best that Audi has ever put on the market. This drive strategy was set out clearly at an early stage, thus providing planning certainty and helping to guide future investments in a targeted and efficient manner. For Audi, this technological change goes hand in hand with the biggest transformation process in the company’s history. A particular focus will be on ensuring that the employees affected are able to train and develop successfully.

 

ESG performance as the basis for a better future

 

Audi already has net carbon-neutral1 operations for the production of its vehicles at several sites. Now the company is focusing even more strongly on sustainability throughout the entire product life cycle – from resource extraction and vehicle operation to recycling of the materials used. In the future, ESG (Environmental – Social – Governance) aspects are to play an important role in all the decisions made by Audi, as well as in its products and services. The main ESG criteria are climate protection, the use of finite resources, employee health and safety and the perception of social responsibility. Another consideration is the robustness of Audi’s corporate governance, for example in terms of compliance and risk management. Audi also submits to external evaluation in all these areas and will be given an internationally recognized ESG rating.

 

Holistic ecosystem puts users first and creates meaningful and fascinating experiences

 

Audi wants to make the progressive premium mobility of tomorrow even more attractive. Alongside the vehicle itself, its focus in the future will be on a holistic customer experience and on ways of integrating that experience into the lives of users. With this in mind, Audi is taking a close look at the users’ needs. They expect fascinating and meaningful experiences from Audi, as well as holistic solutions that seamlessly span all areas of their everyday lives. The ecosystem for electric cars – and in the future also for cars that drive automated – plays a central role in the transformation and will be key to customer satisfaction and thus to long-term, personal customer relationships. An elementary component of the ecosystem is charging, which has already been implemented successfully with charging options at home wall boxes, a comprehensive charging infrastructure with charging points throughout Europe and intelligent route planning. When it comes to further expanding the ecosystem, automated driving in particular will be a game changer. It will give rise to a large number of additional use cases that will fundamentally change the way people use their vehicles. The car will become a personal experience device and can be used as an office, a movie theater, a place to relax or as a space for shopping and gaming. The Audi ecosystem consistently focuses on the user and connects the vehicle with a wide range of services that cover all areas of life – both online and offline. This creates a holistic experience that spans all points of contact with the Audi brand and fits seamlessly into users’ lives.

 

Intelligent hardware: In the future, vehicle part will be fully connected and increasingly made of sustainable materials

 

Thanks to intelligent hardware, customers will be able to continually upgrade their cars going forward. This will ensure that Audi models remain attractive throughout their life cycle. To this end, Audi wants to offer its customers parts with an intelligent information system that proactively sends a request for replacement if it detects wear or a defect. The technical basis for this is provided by the vehicles’ connectivity with a sophisticated interplay of algorithms and sensors. In addition, Audi will recycle components to premium standards to strengthen a circular economy. Sustainable materials and resource-conserving production are key elements here. All these measures are also aimed at positively impacting the residual values of the models in the future. At the same time, Audi is thus expanding its range of services in the after-sales sector and aims to generate additional revenue in this profitable business area.

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