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Audi to Introduce 17 Models in 2014 in Pursuit of BMW

Audi AG (NSU) plans to introduce 17 new or revamped models in 2014 and will move forward with the production an electric version of the R8 sports car in a push to gain momentum on rival Bayerische Motoren Werke (BMW) AG.

“We will increase deliveries in all regions of the world, including Europe,” Chief Executive Officer Rupert Stadler said in a speech to be delivered today at the brand’s headquarters in Ingolstadt, Germany. The CEO expects 2014 revenue to rise slightly and forecast registrations in China, Audi’s biggest market, will exceed 500,000 vehicles for the first time.

The biggest earnings contributor of Volkswagen AG (VOW), Europe’s largest automaker, will invest 22 billion euros ($30.4 billion) in the next five years, with 70 percent going toward new products and technology. Most of the rest will be spent on expanding global manufacturing capacity, including new factories in Brazil and Mexico.

Operating profit in 2013 fell 6.2 percent to 5.03 billion euros ($6.97 billion). Revenue gained 2.3 percent to 49.9 billion euros on higher vehicle sales. Operating profit as a percentage of sales was 10.1 percent, above its long-term target range of between 8 percent and 10 percent.

BMW retained the lead in global luxury-car sales for the ninth straight year in 2013 even as Audi and third-ranked Mercedes-Benz stepped up efforts to overtake the Munich-based manufacturer by the end of the decade. The world’s three biggest luxury-car makers posted fresh sales records last year and expect demand to rise further in 2014 fueled by growth in China and North America.

Revamped TT

Audi introduced a fresh version of the A3 compact last year that helped lift sales 8.3 percent to 1.58 million cars, and is rolling out the model’s sedan variant in the U.S. and China this year. It presented a revamped version of the TT sports car at the Geneva show last week and will add the sporty S1 subcompact to its lineup in the second quarter.

Audi is a cornerstone of parent VW’s strategy to take the auto industry’s top sales spot from Toyota Motor Corp. (7203) by 2018. Wolfsburg-based VW reported last month that fourth-quarter profit rose 18 percent to 3.11 billion euros as record sales at Audi and Porsche offset spending on developing new models and expanding production.

VW forecasts an operating margin for 2014 in a range from 5.5 percent to 6.5 percent, compared to 5.9 percent last year. Revenue is expected to be within a range of 3 percent from a year ago and deliveries are expected to rise “moderately.”

VW is scheduled to release detailed earnings for all brands on March 13.

To contact the reporter on this story: Christoph Rauwald in Frankfurt at crauwald@bloomberg.net

To contact the editors responsible for this story: Chad Thomas at cthomas16@bloomberg.net Chris Reiter

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