Volkswagen's Audi First-Half Profit Surges 46% on Sales of Q5, A8 Models

Volkswagen AG’s Audi luxury division said its first-half profit surged 46 percent as the Q5 sport- utility vehicle and A8 sedan won buyers in China and the U.S.

Net income at the most profitable of VW’s nine group brands was 978 million euros ($1.3 billion), compared with 671 million euros a year earlier, Ingolstadt, Germany-based Audi said today in an e-mailed statement. Audi is targeting record sales of more than 1.08 million cars and SUVs in 2010, an increase of 14 percent from a year earlier.

Audi, which sold 554,939 cars and SUVs in the first six months, has a goal of dethroning Bayerische Motoren Werke AG as the world’s largest maker of luxury cars by 2015. BMW, Daimler AG’s Mercedes-Benz and Audi have boosted sales this year on surging demand in China, the world’s largest auto market, and a rebound in the U.S.

Audi is targeting a return on capital in 2020 of more than 18 percent and a pretax profit margin of more than 8 percent of sales, the company said on May 20. Audi’s forecast compares with a “sound single-digit percentage” sales gain targeted by BMW and Mercedes-Benz’s plan to outpace market growth of 4 percent.

First-half sales of the Q5 increased 52 percent to 74,219 units while A8 deliveries more than doubled to 9,535 cars.

Audi contributed 1.33 billion euros to Volkswagen’s first- half group operating profit of 2.84 billion euros. Wolfsburg, Germany-based Volkswagen, Europe’s biggest carmaker, aims to overtake Toyota Motor Corp. in deliveries and profitability by 2018, and it’s targeting a second consecutive year of record sales in 2010.

The unit aims to introduce a dozen models this year, including the A1, Audi’s smallest vehicle, and a coupe dubbed the A7, as it increases the lineup to 42 vehicles by 2015 from 34 in 2009. Audi also has a 7.3 billion-euro budget to upgrade factories and develop new cars through 2012. Audi is targeting a goal of selling 1.5 million vehicles by 2015.

To contact the reporter on this story: Andreas Cremer in Berlin at acremer@bloomberg.net.

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