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Audi
2006 Annual Report
Craft scale
The R8 is largely
a handcrafted
product
R10 – Le Mans
4,568 km, 423 laps,
24 hours, an historic
victory
Auto aspirations
An international
comparison
of vehicle trends
Australia
7,000 km of desert track:
through the outback
with the Audi Q7
Lang Lang
The exceptional
Chinese pianist and
Audi ambassador
Progressive Performance
Shaping the automotive world of the future

Table of contents

  • Page 1
    ...scale The R8 is largely a handcrafted product Auto aspirations An international comparison of vehicle trends Australia 7,000 km of desert track: through the outback with the Audi Q7 Lang Lang The exceptional Chinese pianist and Audi ambassador Progressive Performance Shaping the automotive world...

  • Page 2
    Audi Group Key Figures 2006 Production Cars Engines Vehicle sales Audi Germany Outside Germany Lamborghini Other Volkswagen Group brands Employees Revenue Profit before tax Profit after tax Rate of return before tax Capital investments Development expenditure recognised as an intangible asset ...

  • Page 3
    ... maps out yet another record-breaking year for the Audi Group - with unit sales, revenue and earnings the best to date in the company's history. Wishing you an enjoyable read, PHOTO: CLAUDIA KEMPF; COVER: PETER KRÄMER Rupert Stadler Chairman of the Board of Management AUDI 2006 ANNUAL REPORT 1

  • Page 4
    THE BOARD OF MANAGEMENT Dr. Werner Widuckel, Human Resources Erich Schmitt, Chairman of the Board of Management of SEAT, S.A. Michael Dick, Technical Development

  • Page 5
    Ulf Berkenhagen, Purchasing Rupert Stadler, Chairman of the Board of Management, Finance and Organisation Ralph Weyler, Marketing and Sales Frank Dreves, Production

  • Page 6
    ... Audi Group again improved its profitability quite substantially last year." Last year the Audi brand extended its attractive product range with an array of new models such as the Audi TT Coupé, A4 Cabriolet, A6 allroad quattro and sporty top-end models in the S and RS car lines. The market launch...

  • Page 7
    ... In the first half of 2007, Audi is already unveiling a number of highlights to take it closer to this objective: the new TT Roadster, the R8 mid-engine sports car and the uniquely designed Audi A5. In addition to increasing its market share in existing markets, the Audi Board of Management attaches...

  • Page 8
    6 AUDI 2006 ANNUAL REPORT

  • Page 9
    ...TDI technology, Audi has set standards in cutting fuel consumption. And in the spectacular triumph of our dieselpowered racing car, the Audi R10 TDI, in the Le Mans 24 Hours, we demonstrated the huge potential of diesel technology. Our latest generation of engines transfers the advantages of the TDI...

  • Page 10
    ... in body manufacturing ECONOMY 24 Size means strength Russia - the metamorphosis of a market 28 One world - one brand Ralph Weyler on the Audi brand 29 International markets A review of Audi locations 34 Wally yachts: pure passion 30 Quality as a recipe for success Winning brands 34 Pure...

  • Page 11
    ... Dr. Werner Widuckel on demographic change 70 Audi TT conquers the world TT sculpture on tour 72 The world of automotive dreams International car trends 76 Learning to win Education through sport in Brazil 78 Lower costs create higher quality Networked working in Purchasing 82 In brief: society...

  • Page 12

  • Page 13
    ..." is the strategy adopted by Audi to promote the responsible use of our environment and resources. Whether investigating innovative fuels, developing fuel-saving engines or specifically trimming weight off designs, Audi's engineers and partners are exploring every avenue in order to rise to...

  • Page 14
    ... Optimising the formula Audi, Volkswagen and Shell are collaborating on the development of synthetic fuels. Synthetic fuels are paving the way for new engine concepts that use fuel much more efficiently and further reduce exhaust emissions. Shell is carrying out research work into the fuels of the...

  • Page 15
    ... innovations at the hardware end in their 180 researchers who work in close coordination with car companies, shipping firms and even the Formula 1 world to optimise fuels. The PAE lab is where the fuel for Michael Schumacher's racing cars was created. And it also formulated the special diesel fuel...

  • Page 16
    14 AUDI 2006 ANNUAL REPORT

  • Page 17
    ... (GTL) process, for example at the World Economic Forum 2007 in Davos. conventional fuels in price terms. But it does have a huge strategic advantage: according to current estimates, the world's gas reserves will last 70 years - 30 years more than our crude oil reserves. Sufficient time, therefore...

  • Page 18
    ... was the first time that a diesel-powered race car had taken overall victory at Le Mans. The fuel that was used in the V12 fitted in the Audi R10 TDI started its journey 20 km offshore from the Central Luconia oil and gas field, off the coast of Bintulu. The natural gas that is piped in is cleverly...

  • Page 19
    ...existence. Fast forward to the year 2006 - no car manufacturer has ever attempted to win a sports car race such as Le Mans with a diesel-engined race car. Having taken three successive victories at Le Mans, the Audi motor-racing veterans saw in the new set of regulations stipulated by the organisers...

  • Page 20
    ... is also helping the environment. Text Peter Weißenberg // Photos Jens Neumann Managing Director of CHOREN Carlhans Uhle plans to have the new SunDiesel plant in operation by the end of 2007. Dietmar Rüger, Head of Process Engineering, is proud of the CHOREN facility that supplies particularly...

  • Page 21
    ...plant is operated. That is one of the key reasons why the Volkswagen Group, another of CHOREN's backers, would prefer it to be sited in Germany. But the SunDiesel idea can in principle be applied wherever there is vegetation. It seems almost paradoxical at a time when oil and gas are in short supply...

  • Page 22
    ...Text Johannes Köbler // Photos Angelika Emmerling company's operations is Wolfgang Hatz, born 1959, Head of Powertrain Development at AUDI AG and since February 1, 2007 for the Volkswagen Group. One particular storey, in a grey-floored open-plan office, is home to the CAD developers. This is where...

  • Page 23
    ... the world's markets. It will be built in six different versions, cover an extensive performance range and be available in numerous different countries. As well as at Gyo ´´r, in Hungary, it will be produced at the brand-new Volkswagen engine plant in Dalian, China. "We will ramp up production to...

  • Page 24
    PROGRESSIVE PERFORMANCE: BODY MANUFACTURING Hybrid construction Lightweight construction as standard Audi has secured a leading place in the automotive world through the use of aluminium. But there is still ample scope for new developments in lightweight construction. The body of the new Audi TT ...

  • Page 25
    ...to use in volume production. The brand with the four rings repeated this success with the current Audi A8, once more capturing the EuroCarBody Award. Aluminium panels have now been integrated for the first time into a steel body on the current Audi A6. Finally, in 2006 the new Audi TT made its debut...

  • Page 26
    ...hammer and sickle. Size means strength: Russia - the metamorphosis of a market A gush of income from gas and oil sales have set Russia's tills ringing and precipitated the country's astonishing economic boom. The... is a force to be reckoned with. Text Daniel Brössler 24 AUDI 2006 ANNUAL REPORT

  • Page 27
    ... Union, people spent much of every day merely trying to get by in an economy where everything was in short supply. Instead of traffic jams, there were queues outside grocery stores. When the >> Russian companies heading for the top After a dramatic process of concentration, companies previously...

  • Page 28
    ... has undergone a radical change during Putin's time in office. The state has promoted a huge process of concentration. The gas monopoly Gazprom has taken over Sibneft, the oil company of the fabulously wealthy Roman Abramovich. The state oil company Rosneft has succeeded in gaining control of large...

  • Page 29
    ... suitcases bursting with cash, ready to buy up luxury apartments and the occasional football club. Yet the Russians are by no means in this business just for fun. Russian investors have already acquired a substantial stake in a German fashion company, shares in a car manufacturer and even an entire...

  • Page 30
    ... for 23 years. euros to around 35,000 euros. Audi aims to increase its sales further by 2015 to around 1.5 million vehicles, thus reinforcing its status as a global brand. The basis of the product portfolio is the A4 car line, which accounts for communication - in other words, introducing local...

  • Page 31
    ... driving force of the South Korean economy. Over a period of more than 50 years, with government support, South Korea has emerged as the sixth-largest in Including car the the manufacturer world. supply industry, the car sector employs some 250,000 people. The sales figures for the domestic market...

  • Page 32
    ... BRANDS Quality as a recipe for success Whether fashion, lighting, porcelain or writing implements, the success of four German brands demonstrates their ability to hold centre stage amid international competition. The key: the high quality of their products. Text Esther Bahne The designer label...

  • Page 33
    ... 2005: EUR 140 mil Consolidated revenu 00 e: over 1,0 Emplo yees worldwid Year founded: 1934 I t has illuminated the German employees of the German lighting manufacturer ERCO are now in action at some of the most prestigious construction sites in the world. The company, established in 1934 in...

  • Page 34
    ... por World market leader R 92.1 million Annual revenue: EU e: 1,257 wid Emplo yees world Year founded: 1998 2 00 million people eat from its plates every day. Its porcelain is used in Caesar's Palace in Las and cups," says Hans G. Beckmann. "We sell solutions to a problem." The age of white gold...

  • Page 35
    ... in allying German engineering expertise to outstanding design and marketing. The result: high-quality, innovative brand products that reflect the tastes of highly discerning customers all over the world. The four encouraging examples portrayed demonstrate what medium-sized businesses can achieve...

  • Page 36

  • Page 37
    ... to the light conditions as it cuts through the waves with its slender hull >> life when Luca Bassani takes you on board one of his fabulous vessels. You could probably describe him as incorrigibly obsessed with lifestyle and design, because for all the cult status that his yacht brand Wally now...

  • Page 38
    ...racing atmosphere: the stern of the motor yacht "118 WallyPower". ing to provide a new point of focus for the yachting world. This, the key to the success of Wally, ultimately also led to a new business idea. Bassani needs neither his own yard nor his own design studio to run his business. He works...

  • Page 39
    ... and cabins for four guests and six crew members. But the focal point is a PHOTOS: WALLY club of owners of this seagoing bullet will have to pay Luca Bassani 18 million euros. To put that in perspective, the same money could buy about 80 Lamborghini models. Wally has thus definitively become the...

  • Page 40
    ... the brand, quattro GmbH has set itself the goal of meeting ideally every customer requirement. And the surprising thing is that virtually everything is indeed possible. Nor is it necessarily a complicated business. The customer need merely visit their nearest Audi dealer. The range of products and...

  • Page 41
    ... customer requirements even more deeply into the development and marketing processes for cars. The Swiss-based market research lab is headed by Prof. Andreas Herrmann. Mayor Michael R. Bloomberg (left) and Audi Board Member for Marketing and Sales Ralph Weyler. The opening of the Audi brand...

  • Page 42
    ...: AUDI R8 PRODUCTION High-tech and handcrafted: The Audi R8 production shop 28 million euros have been invested in this prestige project at Neckarsulm. A sign of Audi's commitment to Germany's manufacturing future. More experienced workers are preferred, particularly for vehicle assembly. Text...

  • Page 43
    ... parts are supplied for the Audi R8 by manufacturers all over the world. After passing through a grand total of 39 stations - 17 in the body shop and 22 in assembly and final inspection - a new R8 is then ready for shipping to the customer. A total of around 250 workers are involved in the process...

  • Page 44

  • Page 45
    ...many years of experience and expertise of the Neckarsulm body shop in the domain of aluminium bodies is exploited. The R8 body tips the scales at just 240 kilograms, and complete with all add-on parts such as doors and lids the aluminium shell weighs 270 kilograms. The cycle time in the body shop is...

  • Page 46
    ...use of robots, the level of automation in the R8 manufacturing process lies at just 25 percent. Bottom right, opposite: only after it has received a thorough final check in the light tunnel does a car leave the assembly line. 44 AUDI 2006 ANNUAL REPORT * fuel consumption figures at the end of the...

  • Page 47

  • Page 48
    ... brand with the four rings has set up a small-scale production shop for its super sports car, the Audi R8*. It is the result of lean processes and production-driven product design, of which Prof. Dr. Jochem Heizmann, Board Member for Production of the Volkswagen Group and Board Member for Production...

  • Page 49
    ...electricity into light W henever engineers and designers at Audi ponder the possibilities for the car headlight of...energy level. They then emit light as they revert to their original level. Thanks to their special operating principle, LEDs are almost entirely free from wear and >> AUDI 2006 ANNUAL...

  • Page 50
    ... virtually inertia-free. White highperformance light-emitting diodes in particular are regarded as an important technology of the future that will also transform the car world in the next few years. And Audi is one of the key players behind this development. The Ingolstadt company, working with the...

  • Page 51
    ...' time. "We already need to start preparing to meet the future requirements of our customers. Even if they themselves have no idea yet what they will want in a few years' time," muses Sola Gomfaus. Innovative LED vehicle lights will undoubtedly be one of the items on the wish list. "LEDs are set to...

  • Page 52
    ... Inspired by a book on early outback pioneers, Jörg Hofmann, Managing Director of Audi Australia Pty Ltd., came up with the idea of a Trans-Continental Crossing to mark the Australian launch of the Audi Q7. What began life as a simple road trip quickly snowballed into a full-scale media event that...

  • Page 53
    TECHNOLOGY: ENDURANCE TEST FOR THE AUDI Q7 Sept 3: Sydney, New South Wales n on a busy A red light changes to gree oy of conv Sydney street, and our ls snakes mode Q7 Audi fifteen gleaming fic. On the traf ing morn midthe into k gecko bonnet of each car is a blac symbol of e ntur adve motif, the ...

  • Page 54
    ...is restored we press nor thward to Cameron's Corner, a remote , sun-scorched junction where the state boundaries of New South Wales, South Australia and Queensland con verge. The couple who run the 'Corne r Store' sometimes go weeks without seeing a customer, so they're deligh ted to see thirty turn...

  • Page 55
    ... the , ty ni er at 4WD fr Australia's the light work of ke ma s Q7 di Au rnoon te af spend the challenge. We p slope, ee st e th and down y hurtling up on Dakar Rall growling as the engines d le il ch lebrate with cars, then ce ges into the the sun plun as...

  • Page 56
    ... Tjuta (The Olgas). It's the halfway point of our journey, a chance to recuperate and prepare for the final stage. Our trusty Audi Q7 veh icles have been cleaned inside and out, and look lik e they've come straig ht from the showroom. They're in showroom condition too, despite the flogging they've...

  • Page 57
    .... Faced with a choice of paying $2.25 per litre or driving 500 km to the next servo, we bite the bullet and fill up all fifteen cars. Bruce, the owner, is probably still laughing now. The end of our voy age in sight, we set the Audi Q7s to cru ise control and let the cars eat up the final...

  • Page 58
    ... of sales in remote outback locations. Providing premium client service to these areas calls for a unique aftersales strategy, as Jörg Hofmann, Managing Director of Audi Australia, explains: "The TransContinental Crossing certainly raised Audi's profile in rural Australia. There was a great deal of...

  • Page 59
    ... tomograph that is the only setup of its kind in the world. The accuracy of the 3D x-ray machine used at AUDI AG is in the order of onehundredth of the breadth of a human hair (about one micrometre). This was the first time it had been used for purely archaeological purposes. Dr. Erwin Keefer...

  • Page 60
    ... by means of reflection measurement of infrared rays is able to pick up spatially whether and what objects are present in front of a vehicle. It converts the data into images that improve in quality the more pixels they contain. The developers at Audi Electronics Venture GmbH have a market of...

  • Page 61
    ...edge length of just 0.04 millimetres, not even half the breadth of a human hair. The 1,024-pixel sensor on the A8 test car can see for 40 metres and it converts the information into data 100 times a second. In the test setup, the images that it supplies appear on a large monitor. A person walking in...

  • Page 62
    ... they can be installed anywhere. "We can use PMD sensors for identifying the car's environment - for prompting emergency braking, assisting lane changes or facilitating sensor-controlled parking manoeuvres," explains Torsten Gollewski. "And with a sensor in the interior we can also observe the front...

  • Page 63
    ... where product cycles are much shorter than in the car business. The think-tank in Gaimersheim serves as an uncomplicated docking-on point to the parent company Audi for external start-ups. "Modern technology is immensely enjoyable," believes Johannes Köbler (44). The freelance motoring journalist...

  • Page 64
    ... as an independent enterprise under the umbrella of AUDI AG. Its customers include the group brands Audi, Lamborghini, Bentley, ˇ SEAT, Skoda and VW, as well as external carmakers. The Audi Toolmaking Division scooped the award for the second time. Audi Hungaria Institute The decision was taken...

  • Page 65
    ... mid-engine sports car went into production at Neckarsulm in September 2006 and the R8 will be The Audi R8 made its first public appearance at the Paris Motor Show. in brief: technology appearing on the market in the first half of 2007. Top marks for safety In 2006 the Audi A4 and A6 were awarded...

  • Page 66
    ... and well-qualified employees, an ageing workforce if anything means added expertise." Dr. Martina Morschhäuser Above: Dr. Werner Widuckel, Board Member for Human Resources. Left: Dr. Martina Morschhäuser, Deputy Managing Director of the Iso-Institut Saarbrücken. 64 AUDI 2006 ANNUAL REPORT

  • Page 67
    ... means that today's sixty year olds are now capable of a higher >> MORSCHHÄUSER: Demographic initiatives were launched here, a commission enquiry process set up and intensive PR work done as early as the 1990s. In terms of the health and employment rate of older people, the Scandinavian countries...

  • Page 68
    ... that used to be fundamentally unavailable. MORSCHHÄUSER: Forward-looking training and promotion of health is not worthwhile for companies that are only interested in their next set of business figures. You have to plan on a longer time horizon, like Audi. Nor is it possible to quantify every...

  • Page 69
    ... five years, we want to be able to provide every employee with their individual health profile through this system." Dr. Werner Widuckel Above: working ergonomically on the Audi A3 assembly line. Right: diagnosis and consultation following the Audi Checkup. PHOTO (RIGHT): AUDI AUDI 2006 ANNUAL...

  • Page 70
    ... becomes relevant at two points in the process of collectively negotiated pay. Let's look at working life first: I can't imagine anyone still working on vehicle assembly at 67. But if we are to make an earlier exit possible, the worker has to The age structure of AUDI AG 2006 Male 939 1,877...

  • Page 71
    ..., we need to slow down the pace of work and introduce short breaks for recuperation. But that means that we are facing increased investment outlay and are consciously accepting a fall in productivity. How can you compensate for such losses? WIDUCKEL: If we are not going to start cutting pay, then we...

  • Page 72
    ... many a gaze in Germany and China in 2006, as an unusually eye-catching ambassador. The 10-tonne car sculpture, on a scale of 2.5:1, was created to symbolise the innovative prowess of German technology under the umbrella campaign "Germany - Land of Ideas" during the football World Cup. The giant...

  • Page 73
    ... of the Board of Management of AUDI AG, unveiled the outsize version of the current Audi TT on Chang An Street, the major east-west axis running through the Chinese capital. In sending its sculpture there, Audi was also emphasising the importance of the Chinese car market. AUDI 2006 ANNUAL REPORT...

  • Page 74
    ... citizen, van driver or sports car enthusiast - they all share one passion. The indispensable accessory of every Spanish car is unquestionably the horn. It cuts a swathe through any traffic jam, turns heads and is the perfect accompaniment to the local football team's latest victory. In this latter...

  • Page 75
    ... practical in Britain as a cricket stadium in Berlin. PHOTO: JUTTA KLEE/CORBIS just some of the As) - are now either dead or moribund. Yet this sports car tradition continues with Britain's dominance of the world motor racing industry. AUDI 2006 ANNUAL REPORT 73

  • Page 76
    ... by their SUVs. USA: freedom XXL Howard Walker, editor of MotorUK, the leading motoring magazine based in London, on the relationship between Americans and their cars. baseball practise, to football games, running to the grocery store or the shopping mall. Remember that unlike Europe, America was...

  • Page 77
    ... flow Martin Kühl is a journalist and Sinologist. Together with his wife Christiane Kühl, he established the journalism office karmanews in Beijing at the start of 2000. Martin Kühl reports from China for such media as Focus, Financial Times Deutschland and Welt am Sonntag. a business car...

  • Page 78
    ...want to change things, we have to start with children," Ayrton Senna was wont to say. His sister Viviane, who has been in charge of the foundation named after Sporting competition helps children with their personal and social development. A warm meal is part of the deal. 76 AUDI 2006 ANNUAL REPORT

  • Page 79
    ...the annual exchange of findings. There are 1.3 million children with no schooling in Brazil. Around three million children have to work. According to official statistics, approximately half a million young people aged between 15 and 24 in São Paulo alone did not finish primary school. The number of...

  • Page 80
    SOCIETY: NETWORKED WORKING Lower costs create higher quality Car manufacturers and suppliers are inextricably linked. The one cannot function without the other. Nevertheless, the relationship is not always easy. Is it possible to supply consistently high quality at ever lower prices? Interview Eric...

  • Page 81
    ...manufacture goods profitably in our country. So it is imperative to also keep expanding our international network. We need to combine the potential of Germany as an industrial base with production locations all over the world. That will ultimately enable us to offer our customers attractive products...

  • Page 82
    ... in the world, and one of Germany's top 100 industrial companies. It employs over 24,000 people worldwide at 70 production plants, production subsidiaries and joint ventures. Hella's customers include all leading car and systems manufacturers, as well as the automotive parts trade. That doesn...

  • Page 83
    ...procurement people; it is also influenced by the Technical Development, Quality Assurance, Production and Logistics departments. And we will be setting the standard even higher in future. The Purchasing Department at AUDI AG has a staff of around 400, procuring materials for the entire company, from...

  • Page 84
    ... colleagues take their seats in the AUDI AG film theatre. Today is a special day for her - and for Audi, her host. Three delegations from the Lebenshilfe workshops are paying a return visit to Audi. Plant Manager Frank Dreves (Audi Member of the Board of Management for Production since February...

  • Page 85
    ... product designer. Their task will be to reconcile the diverging wishes of design studio, technology and workshop. Following the successful completion of their training, all apprentices can expect to find secure jobs at Audi. PHOTOS: AUDI * fuel consumption figures at the end of the Annual...

  • Page 86
    SPORT: THE AUDI R10 TDI AT LE MANS The longest day 24 hours to establish a landmark in motor racing history: how a diesel car became the first of its breed to win the classic endurance race. Text Herbert Völker // Photos Bodo Kräling

  • Page 87

  • Page 88
    ... form of works-backed activities at the highest level. Only the latest achievements in diesel technology have made it possible to stage a direct contest, complying with that bare minimum of technical requirements that is the norm in top motor sport. For the occasion, Audi built a highperformance V12...

  • Page 89
    AUDI 2006 ANNUAL REPORT 87

  • Page 90
    88 AUDI 2006 ANNUAL REPORT

  • Page 91
    ..., an accretion of show and rituals. Now that other endurance races have gradually faded away, the Le Mans night comes across as a rare, precious reminder of bygone years in the modern world of motor sport. The two Audi R10 TDI cars were manned by the absolute elite among "endurance drivers with the...

  • Page 92
    ... of fuel (90 litres) allows. That normally means 12 laps, or about three-quarters of an hour. But the extra economy of the diesel principle meant that the Audi cars managed to stay out on the track for 14 laps at a time, saving four pit stops over the whole distance. In the race's closing phase...

  • Page 93
    AUDI 2006 ANNUAL REPORT 91

  • Page 94
    92 AUDI 2006 ANNUAL REPORT

  • Page 95
    SPORT: AN AUTOMOTIVE ARISTOCRAT IN THE LAND OF THE BULL The return of a legend The Lamborghini "Murciélago" owes its name to a particularly brave Andalusian fighting bull. He helped the Miura family of breeders to secure the fame from which the car manufacturer, too, subsequently benefited. Time ...

  • Page 96
    ... called in on Eduardo Miura Fernández in the 1960s. The outcome of his visit was a legendary name in the motoring world: Lamborghini Miura. Today, the family business at Zahariche is run by his sons Eduardo and Antonio Miura. There are many hundreds of adolescent bulls, oxen, cows and calves...

  • Page 97
    ..., built its success in bullbreeding on the fighting bull Murciélago. his bull than about his pick-up truck. Anything happening to the former would be far more costly than just damaged bodywork. Even the slight>> * fuel consumption figures at the end of the Annual Report AUDI 2006 ANNUAL REPORT...

  • Page 98
    "The truly brave bull gives no warning before it attacks." Ernest Hemingway The Andalusian bull-rearing dynasty meets its aristocratic offshoot: the Miuras and the Murciélago. 96 AUDI 2006 ANNUAL REPORT

  • Page 99
    ... "Lamborghini. A tempo furioso" by Stephan Grühsem and Peter Vann. This 177-page illustrated book is published by Motorsport Verlag, ISBN-13: 978-3613025547. It contains extensive articles on the history and philosophy of the brand with the bull. * fuel consumption figures at the end of the Annual...

  • Page 100
    ...for a regatta win in the Hamilton Island Race, now in its 23rd year. As the official car partner, Audi ensured that competitors at the airport venue enjoyed a race-course atmosphere and also supplied the Regatta's top prize: an Audi A4 Avant. The keys to the vehicle were presented to Australian Dave...

  • Page 101
    ... Saviola with his Audi Q7. Audi motor sport legends at Goodwood Audi focused on the sports expertise of the brand with the four rings at last year's "Festival of Speed" at Goodwood, England, one of the world's leading classic car events. Spectators were not only able to view the current Le Mans...

  • Page 102
    ...icon and founding father of the styling company Italdesign, and Walter de'Silva, Head of Volkswagen Group Design. Interview Marco Degl'Innocenti // Photos Mirco Taliercio The design experts Giorgetto Giugiaro (left) and Walter de'Silva on a casual stroll through Turin. 100 AUDI 2006 ANNUAL REPORT

  • Page 103
    ... car designers in the world. The Italian was Chief Designer of the Audi brand group from March 2002 to January 2007, and therefore also responsible for SEAT and Lamborghini. Since February 2007, de'Silva has been Head of Volkswagen Group Design. He began his career in 1972 at the Fiat Design Centre...

  • Page 104
    .... And as designers, you are always anticipating future trends ...DE'SILVA: Yes, of course. Developing a car takes on average four to four and a half years. Our clocks are always running fast, so to speak. The customer never notices it, but our clocks are always set to summer time - the difference...

  • Page 105
    ... pictures and paintings on my walls at home, but no car photos. Marco Degl'Innocenti, 58, freelance journalist, was born in Perugia (Italy) but has lived and worked in Germany for many years. He writes for La Gazzetta dello Sport, La Stampa and Auto & Design, among other publications. 01. 02. 03...

  • Page 106
    ... jet, the super sports car from Sant'Agata is fitted with an engine producing a sound reminiscent of aircraft engines. Whether the Italian navy may be considering ordering a Lamborghini in NATO green metallic is not for us to say. 104 AUDI 2006 ANNUAL REPORT * fuel consumption figures at the end...

  • Page 107
    DESIGN: MEASURING STRENGTH AUDI 2006 ANNUAL REPORT 105 PHOTO: AUDI

  • Page 108
    ... who contemplates his works will doubt that claim. Gehry continues: "For me, there is a close connection between motion and emotion," drawing an analogy with the car. There is another overlap between these two spheres: the Canadian genius, a native of Toronto, uses a design program that was actually...

  • Page 109
    ...At the start of his career he designed the famous Norton House, with its corrugated iron, wire netting, wood and colourful tiles, here in Venice Beach. "Cars are cultural expressions of movement; that of course also inspires me in my work," confides Gehry, glancing at the brochure of the new Audi R8...

  • Page 110
    ... car at the end of the year, with most of the proceeds being used to fund scholarships for young designers. in brief: design Award-winning TT body The Automotive Circle International presented Audi with the EuroCarBody Award in recognition of its innovative body concept for the Audi TT. The sports...

  • Page 111
    ... markets, further improve our dealer network, enhance the efficiency of our corporate processes and add new, attractive models to our product range. We are heading in the right direction, as reflected in the rise in unit sales for 2006. To achieve our objectives, we seek to offer topquality products...

  • Page 112
    Traveller between two worlds: Luc Donckerwolke, SEAT Head of Design, at his comic-book and real-life workplaces. 110 AUDI 2006 ANNUAL REPORT

  • Page 113
    ... Head of Design at SEAT. Seated at the desk of his glazed office in a zone shielded from prying eyes, above the light inner courtyard of the SEAT Design Centre in Sitges, near Barcelona, is a politely restrained forty year old, dressed casually in black as is his wont. And he is reading a comic book...

  • Page 114
    ... marathon rally. Maybe we'll even see this car in action in one of the next volumes." 'V' on the front for the comic-book series purely as a hobby." Jean Graton's son Philippe has been running the company since 1994. He writes the stories and, together with his team of cartoonists in...

  • Page 115
    ... story is that this compact car itself spent some time travelling between the real and the fantasy worlds, as Donckerwolke reports in amusement: "There was a version with a second Vaillante V on the front radiator grille, likewise positioned beA SEAT press kit in the style of a Vaillant comic book...

  • Page 116
    ...Festival in Chicago in 1999, Lang Lang went on to become one of the most successful pianists in the world. The 24 year old started to learn the piano at the age of three, first of all in his home city of Shenyang in Northeast China. He embarked upon his studies at the Conservatoire in Beijing at the...

  • Page 117
    AUDI 2006 ANNUAL REPORT 115

  • Page 118
    ...with the many years he has spent living abroad. His manner expressed utter independence, openness and relaxation. He came across as easy-going, direct and in touch with himself - key requirements in an artist. These qualities allow an artist to dedicate themselves unreThe second time I met Lang Lang...

  • Page 119
    ... has won awards in China, is now also available in German. Audi in the Middle Kingdom Audi extended its success story in China in 2006, bettering the prioryear total by 22,830 units or 38.8 percent, with vehicle sales of 81,708. Audi has consequently further consolidated its position as the leading...

  • Page 120
    ... exclusive highlight: the new Audi R8* sports car as the main prize in the charity prize competition sponsored by the German Track and Field Association to raise money for the initiative "Active Camps for Young People". The brand with the four rings is moreover the new car partner of "Wetten, dass...

  • Page 121
    ... in real life, but also on the silver screen. The brand with the four rings has now been appearing in major film productions for a number of years, in the capacity of car partner. In 2004, Audi even purpose-built the futuristic Audi RSQ sports coupe for the event movie "I, ROBOT" starring Will Smith...

  • Page 122
    ... of race engines. You have both been driving extraordinary cars today: the Auto Union Grand Prix Type C racing car from 1936 and the ultramodern Audi R8* sports car. What is the particular fascination of driving on the Nürburgring - does it tie in with your everyday lives? LANG: My experience of...

  • Page 123
    ...rush of adrenalin on the circuit, and intensive shop-talk about cars and watches by the trackside: Rupert Stadler, Chairman of the Board of Management at AUDI AG, and Gerd-R. Lang, founder and owner of Chronoswiss Uhren GmbH, discuss what stirs markets and passions. Interview Markus Brakel // Photos...

  • Page 124
    .... I think that answers your question! I believe we can still be successful while incurring high wage costs. But the result must then always be a product that other people all over the world crave to own. In other words, a hightech product that arouses needs all over the world. It can't afford to be...

  • Page 125
    ...: we are the first car manufacturer in the world to be offering main headlights featuring LED technology. As well as for the daytime running lights, this innovative lighting technology will in future be used for the low-beam and highbeam headlights in our thoroughbred sports car, the R8. If we...

  • Page 126
    ... on every continent, in fact - in such a way that they understand us as a brand. Understand how we "tick", what our values are and what drives us on. It's a question of continuity, and also responsibility. If we can succeed at that, we can be sure of long-term success. 124 AUDI 2006 ANNUAL REPORT

  • Page 127
    ...'s Report Declaration of the AUDI AG Board of Management 126 127 128 128 131 133 135 138 139 141 144 149 151 152 153 153 156 160 161 Consolidated Financial Statements of the Audi Group at December 31, 2006 Income statement Balance sheet Cash flow statement Statement of changes in equity Notes to...

  • Page 128
    ... pursuant to Section 6.6 of the Code Stock option schemes and similar securities-based incentive arrangements System of remuneration No notifiable acquisition and sale transactions were carried out in the past financial year. AUDI AG does not offer any such schemes or incentive arrangements...

  • Page 129
    ... with high growth rates. It closed the year on 569.60 points, having gained 24 percent overall in the course of the year, which it had started on 459.22 points. Audi share price trend The development in the AUDI AG share price represented an impressive gain in value. The shares started 2006 on EUR...

  • Page 130
    ... Audi brand philosophy. The customer experiences these values through the diverse range of models that enabled the Audi Group to expand on global car markets yet again in 2006, and thus further strengthen its position. Sales of Audi vehicles by market 2006 Germany Europe excluding Germany USA China...

  • Page 131
    ... mbH Audi Volkswagen Korea Ltd. Audi Volkswagen Middle East FZE Automobili Lamborghini S.p.A. Lamborghini ArtiMarca S.p.A. MML S.p.A. AUTOGERMA S.p.A. The Group Volkswagen AG, which currently controls around 99 percent of the share capital of AUDI AG, is the major shareholder. A profit transfer...

  • Page 132
    ... by the Annual General Meeting. The other half of the Supervisory Board members shall be employees' representatives who are elected by the employees in accordance with German Codetermination Law. A total of seven of these employees' representatives shall be employees of the company; the remaining...

  • Page 133
    ... with members of the Board of Management or employees in the event of a takeover bid. Corporate steering Strategy The management of the Audi Group is systematically focusing its business activities on the objective of establishing Audi as the most successful premium brand in the world by 2015. The...

  • Page 134
    ... markets - the Audi brand was even recently voted "Brand of the Year". The high quality of Audi vehicles is reflected for instance in the first place achieved in the J.D. Power Asia Pacific study. As part of its goal to become the most successful premium manufacturer, the Audi Group has moreover set...

  • Page 135
    ... Audi Group lives up to its brand identity "Vorsprung durch Technik" in particular by systematically bringing innovations to product maturity. The employee total in the Research and Development area averaged 5,946 (5,653) employees over the year, comprising 5,717 (5,419) at AUDI AG, 99 (93) at AUDI...

  • Page 136
    .... The entire body weighs only 272 kilograms - and is therefore around 20 percent lighter than conventional designs. V12 TDI - an international sensation in the Audi Q7 The world's most powerful diesel engine for a passenger car was unveiled in the Audi Q7, and will soon go into production. In the...

  • Page 137
    ... aid of brake assist. For safety reasons, however, the emergency stop is not prompted by the system itself. Employee matters Workforce 2006 Audi Group, average for the year of which: AUDI AG Ingolstadt plant Neckarsulm plant AUDI HUNGARIA MOTOR Kft. Lamborghini Group* AUTOGERMA S.p.A. * excluding...

  • Page 138
    The proportion of people with severe disabilities in relation to the total workforce of AUDI AG was 5.2 (5.1) percent at the end of the year. Audi in addition awards contracts to "Lebenshilfe" workshops for the handicapped in the Ingolstadt and Neckarsulm regions. Employees at Lebenshilfe ...

  • Page 139
    ... of the traditional distinction between blue-collar workers and white-collar staff. This offers better development prospects for many employees. At the start of 2007, the Audi workforce of around 45,000 at the two German plants will be allocated to the collectively negotiated pay groups. ERA also...

  • Page 140
    ... projects that closely match the current research and development requirements of the Audi Group as an innovative car manufacturer are chosen by a steering group in which each partner has equal representation. The advantage for those involved is that the students gain an insight into the world of...

  • Page 141
    ... Ecology AUDI AG Production plants: Ingolstadt, Neckarsulm (Germany) Environmental Management Officer AUDI HUNGARIA MOTOR Kft. Production plant: GyÅ'r (Hungary) Environmental Management Officer Automobili Lamborghini Holding S.p.A. Production plant: Sant´Agata Bolognese (Italy) Work group: End...

  • Page 142
    ... trading Climate change and energy efficiency are the key environmental issues of our age. The European Union has therefore adopted a pioneering role in the field of climate protection and introduced trading of CO2 emissions rights on January 1, 2005. The Audi plants at Ingolstadt and Neckarsulm...

  • Page 143
    ... 400 0 Vehicle production 2) ('000 units) Engine production ('000 units) Overall energy consumption (GWh) 732 2004 2005 2006 745 765 826 1,343 1,486 1,695 1,896 2,070 2,114 2,139 2,156 1) Ingolstadt, Neckarsulm, GyÅ'r and Sant'Agata Bolognese plants 2) excluding Audi A4 Cabriolet, RS...

  • Page 144
    ... benefited from the sharp rise in raw materials and energy prices on the world markets. The Asia-Pacific region remained economically dynamic. Whereas the pace of growth slowed down somewhat towards the middle of the year in some emerging countries, the Chinese economy continued to expand at a high...

  • Page 145
    ... to product, process and cost management. The success of the measures taken is reflected in the new record figures for production, unit sales and revenue for the past financial year. The substantial rise in earnings figures supplies impressive evidence of the qualitative growth of the Audi Group and...

  • Page 146
    ... services. Breakdown of the consolidated cost of materials by group company 16.8 % Other group companies 67.5 % AUDI AG 15.7 % AUDI HUNGARIA MOTOR Kft. Procurement was faced with major challenges in the past financial year as a result of the considerable price rises for raw materials and energy...

  • Page 147
    ... The Audi Group stepped up production to 926,180 (811,522) vehicles in 2006. This represents an increase of 14.1 percent and marks a new all-time production record for the company. The production total comprised 924,085 (810,086) Audi vehicles and 2,095 (1,436) sports cars of the Lamborghini brand...

  • Page 148
    ... built at the Neckarsulm plant during the past financial year. This surpassed the previous year's high total by 4.5 percent. Mid-way through the year, the ultra-sporty Audi S8 version joined it on the market, adding impetus to demand for the car line. Engine production 2006 Audi Group of which AUDI...

  • Page 149
    ... Ingolstadt, Neckarsulm, GyÅ'r and Barcelona. Sales and Distribution The Audi Group boosted worldwide sales of Audi vehicles by 9.2 percent in the past financial year, to 905,188 (829,109) units, thus setting a new all-time record. 257,792 (247,125) Audi models were sold in the domestic market...

  • Page 150
    ... Audi vehicles sold by the Audi Group in the past financial year were destined for Western Europe. It registered significant growth rates in the key markets of this region, despite these markets as a whole contracting. Audi for example boosted its unit sales in the United Kingdom - the brand's most...

  • Page 151
    .... and Audi Volkswagen Middle East FZE. Revenue from sales of these brands of vehicles enjoyed an increase of 5.0 percent in the 2006 financial year. The cost of sales for the Audi Group rose by 16.5 percent and therefore by a slower rate than revenue. The purchase price reductions and productivity...

  • Page 152
    ...The rate of return before tax, for instance, rose from 4.9 percent to 6.2 percent. The return on investment, as an indication of the profitability of a company, showed an impressive rise from 9.7 to 14.2 percent, for the first time exceeding the threshold of the long-term target of the Audi Group of...

  • Page 153
    ... by Volkswagen AG and the allocation to the other retained earnings of the balance of EUR 487 (362) million remaining after the transfer of profit. Actuarial gains from the remeasurement of defined benefit liabilities moreover affected this figure. The equity ratio of the Audi Group consequently...

  • Page 154
    .... Within this, current provisions showed an increase on the prior-year level due to the sales volume, and other liabilities rose following the higher profit transfer to Volkswagen AG. Capital investments and cash flow in the Audi Group 2003 5,000 4,000 3,000 2,000 1,000 0 Capital investments (EUR...

  • Page 155
    ... of cover are equalised via the cash pool at Volkswagen AG. All transactions are handled on market terms. At the end of the financial year, the Audi Group had other financial obligations amounting to EUR 1,520 (1,202) million, mainly in the form of ordering commitments. An overview is provided in...

  • Page 156
    ... markets of USA and China, but also in Germany, may lead to price erosion and higher marketing costs, with a correspondingly negative impact on revenue and earnings. In Europe, the Italian car market in particular has been dominated by an exceptionally high level of sales incentives for some time...

  • Page 157
    ...risks to which the Audi Group is exposed as a result of its business activities comprise market price risks (exchange-rate, interest-rate and price risks from commodities), creditworthiness risks and liquidity risks. As a result of its worldwide sales markets, the Audi Group is exposed to particular...

  • Page 158
    ... year as a whole, the Audi Group expects worldwide unit sales to grow by around 1 percent to 55 million vehicles. Vehicle sales should recover somewhat on the highly competitive US car market, and rise to 16.8 million units. By contrast, in Western Europe (excluding Germany) the Audi Group expects...

  • Page 159
    ... growth in unit sales. Despite higher capital investments on extensions to the model and engine range and on the further expansion of the worldwide dealer and service network, the key earnings data for 2007 will remain at the outstanding level of the previous year. Thanks to the positive impact of...

  • Page 160
    ... structures, improving the productivity and quality of process chains, and strengthening customer loyalty. All investment measures share the same objective of lastingly strengthening the market position of the Audi Group through a forward-looking model and brand strategy. The investment volume...

  • Page 161
    ...future developments The Audi Group is striving for sustained, qualitative and quantitative growth in 2007 and indeed in subsequent financial years. This objective will moreover be evident from the business figures for 2007. Disclaimer The management Report contains statements relating to anticipated...

  • Page 162
    ... financial statements prepared by AUDI AG, Ingolstadt, comprising the balance sheet, income statement, statement of recognised income and expense, cash flow statement and the notes to the consolidated financial statements, together with the group management report for the business year from...

  • Page 163
    ... Code, AUDI AG is obliged to prepare its consolidated financial statements in accordance with the requirements of the International Accounting Standards Board (IASB). The regularity of the consolidated financial statements and group management report is assured by means of internal controlling...

  • Page 164
    ... investments accounted for using the equity method Finance cost Interest expense Interest on provisions Other financial results Financial result Profit before tax Income tax expense Profit after tax Interests of AUDI AG shareholders Appropriation of profits Profit transfer to Volkswagen AG Transfer...

  • Page 165
    ... accounted for using the equity method Other long-term investments Deferred tax assets Other receivables and other financial assets CURRENT ASSETS Inventories Trade receivables Effective income tax assets Other receivables and other financial assets Assets held for sale Securities Cash and cash...

  • Page 166
    ... of profit (of which to Volkswagen AG: EUR 462 million (previous year EUR 405 million)) Change in financial liabilities and in credit extended Lease payments Cash flow from financing activities Effect of changes to the group Effect of foreign exchange-rate changes Change in cash and cash equivalents...

  • Page 167
    ... settlement of cash flow hedges Currency translation differences Tax items credited directly to equity Actuarial gains and losses from defined benefit liabilities Income and expense recognised directly in equity Profit after tax Total expense and income recognised in the financial year 2006 2005...

  • Page 168
    ... values, as well as licences thereto Goodwill Development expenditure recognised as an intangible asset, products currently in development Development expenditure recognised as an intangible asset, products currently in use Payments on account for intangible assets Changes in consolidated companies...

  • Page 169
    Reduction in gross carrying amounts Carrying amounts Costs Dec. 31, 2006 Accumulated depreciation and amortisation Jan. 1, 2006 Changes in consolidated companies Currency changes Additions, scheduled Additions, unscheduled Transfers Disposals Writeups Accumulated depreciation and ...

  • Page 170
    ... values, as well as licences thereto Goodwill Development expenditure recognised as an intangible asset, products currently in development Development expenditure recognised as an intangible asset, products currently in use Payments on account for intangible assets Changes in consolidated companies...

  • Page 171
    Reduction in gross carrying amounts Carrying amounts Costs Dec. 31, 2005 Accumulated depreciation and amortisation Jan. 1, 2005 Changes in consolidated companies Currency changes Additions, scheduled Additions, unscheduled Transfers Disposals Writeups Accumulated depreciation and ...

  • Page 172
    ...German share-issuing company (Aktiengesellschaft). Its registered office is in Ettinger Strasse, Ingolstadt, and it is entered in the Commercial Register in Ingolstadt under HR B 1. Around 99 percent of the share capital of AUDI AG is held by Volkswagen AG, Wolfsburg, with which a control and profit...

  • Page 173
    ... AUDI AG directly or indirectly has scope for determining the financial and business policy in such a way that other group companies benefit from the activities of the companies in question (subsidiaries). Consolidation begins at that point in time from which it acquires the opportunity for control...

  • Page 174
    ... the composition of the Audi Group: Total AUDI AG and fully consolidated subsidiaries Germany Other countries Enterprises whose shares are accounted for using the equity method Germany Other countries Subsidiaries reported at cost of purchase and other associates Germany Other countries 2006 2005...

  • Page 175
    ... respective group companies. The foreign companies belonging to the Audi Group are foreign entities which prepare their financial statements in their local currency. The only exceptions are AUDI HUNGARIA MOTOR Kft. and Audi Volkswagen Middle East FZE, which prepare their annual financial statements...

  • Page 176
    ... loss resulting from this test is recognised. Property, plant and equipment Property, plant and equipment are measured at cost, less scheduled straight-line depreciation according to the pro rata temporis method. The costs of purchase include the purchase price, ancillary costs and cost reductions...

  • Page 177
    ...test for impairment, cash flows anticipated in the future are discounted at rates of between 9.0 and 9.8 percent. Impairment loss pursuant to IAS 36 is recognised where the recoverable amount from the use of the asset in question has fallen below its carrying amount. Within the Audi Group, the value...

  • Page 178
    ... to recently completed transactions between independent business partners, the use of the current market prices of other assets that are essentially similar to the asset in question, discounted cash flow methods, and option pricing models that take account of the specific circumstances of the...

  • Page 179
    ... to be realised. Inventories Raw materials and supplies are measured at the updated average cost of purchase or at the lower net realisable value (net selling price). Other costs of purchase and purchase cost reductions are taken into account as appropriate. Work in progress and finished goods are...

  • Page 180
    ... cost increases to be taken into account at the balance sheet date, according to IAS 37. Notes to the consolidated income statement 1 Revenue The revenue of the group, by brand, is made up as follows: Defined benefit liabilities EUR million Audi brand Lamborghini brand Volkswagen brand SEAT brand...

  • Page 181
    .... The cost of sales rose underproportionally compared with revenue in 2006. The cost of sales included EUR 547 (-) million in impairment losses on intangible assets and property, plant and equipment. 3 Distribution costs Distribution costs substantially comprise expenses for marketing and sales...

  • Page 182
    ... method Total result from investments accounted for using the equity method 2006 18 1 + 17 2005 - 12 - 12 8 Finance cost EUR million Interest expense Other interest and similar expenses of which to affiliated companies Total interest expense Interest on provisions Interest on employee benefit...

  • Page 183
    ... income from investments in affiliated companies relates above all to a share in the profits of Volkswagen Logistics GmbH & Co. OHG, Wolfsburg. Of the expenses from investments in affiliated companies, the sum of EUR 59 million is attributable to an impairment loss on the investment in a Brazilian...

  • Page 184
    ... surcharge of 5.5 percent and the average trade earnings tax rate for the group. Deferred taxes are likewise calculated at a rate of 38.3 percent in the financial year under review, as in the previous year. The national income tax rates applicable for foreign companies range from 0 percent to 40...

  • Page 185
    ... expenses not deductible for tax purposes temporary differences and losses for which no deferred tax has been recorded Tax income/expense not relating to the period Effects of tax-rate changes Other tax effects Income tax expense reported Effective tax rate in % 2006 1,946 745 - 84 - 58 23 64 - 138...

  • Page 186
    ...to be transferred to Volkswagen AG on the basis of the profit transfer agreement. 12 Earnings per share Basic earnings per share are calculated by dividing the profit share due to AUDI AG shareholders by the weighted average number of shares outstanding during the financial year. In Audi's case, the...

  • Page 187
    ... goodwill is tested at the end of the year. The Audi Group uses the value in use as the basis for determining any possible impairment. The planning data was prepared on the basis of available knowledge. A slight increase in demand for cars in Italy is expected. Research and development expenditure...

  • Page 188
    ...106 The change in investments in affiliated companies stems principally from the impairment loss on ...Loans advanced to affiliated companies Loans advanced to associates Other loans advanced Other receivables from affiliated companies of which from derivative currency hedging instruments (cash flow...

  • Page 189
    ... and supplies Work in progress Finished goods and merchandise Payments on account for inventories Dec. 31, 2006 373 316 1,418 2 2,109 Dec. 31, 2005 367 279 1,396 0 2,042 Inventories amounting to EUR 27,442 (23,552) million were booked to the cost of sales at the same time that revenue from...

  • Page 190
    ... the previous year concerned exclusively Audi Synko GmbH, which was sold with effect from January 1, 2006. The profit from the sale was booked to other operating income. 23 Securities Securities held as current assets comprise fixed-interest or variable-interest securities and shares. The rates of...

  • Page 191
    ... not affecting income Result from the sale of securities Result from settled cash flow hedges Tax items credited directly to equity Differences from changes in consolidated companies Dividends paid Withdrawal of holders of minority interests Capital contributions Position at Dec. 31, 2006 110 - - 57...

  • Page 192
    ... the company. In the year under review, it rose to EUR 483 million as a result of a contribution of EUR 231 million by Volkswagen AG to the capital reserve of AUDI AG. The opportunities and risks from foreign exchange contracts and currency option transactions serving as hedges for future cash flows...

  • Page 193
    ... five years amount to EUR 148 (56) million. Current other liabilities EUR million Liabilities to affiliated companies of which from derivative currency hedging instruments (cash flow hedges) of which from commodity futures Liabilities to associates Advances received for orders from customers Other...

  • Page 194
    ... length of service and the remuneration of the employees. Within the Audi Group, a distinction is made ...Employee Benefits). The remuneration-based annual cost of providing employee benefits is invested in funds on a fiduciary basis by Volkswagen Pension Trust e.V. This model offers AUDI AG employees...

  • Page 195
    ...65 0.15 4.75 2.43 1.05 The amounts recognised in the income statement are as follows: EUR million Current service cost for services provided by the employees in the financial year Past service cost Interest cost Expected return on plan assets Total of expense and income recognised in the income...

  • Page 196
    ... under a separate item within equity, after taking account of deferred tax. The present value of defined benefit obligations changed as follows: EUR million Present value at January 1 Service cost Interest cost Actuarial losses Pension payments from company assets Pension payments from fund assets...

  • Page 197
    ... other reasons for long-service awards, pre-retirement part time arrangements, suggested improvements and ex gratia payments. The other provisions relate to a wide range of one-off risks. The provisions changed as follows: EUR million Obligations from sales operations Workforce-related provisions...

  • Page 198
    ...for tax purposes in Germany, and payments to foreign tax authorities. The change in cash and cash equivalents as a result of changes to the group relates to companies that are consolidated for the first time and were carried at cost in previous years. The cash flow from investing activities includes...

  • Page 199
    ... total of all buying and selling prices on which the transactions are based: EUR million Nominal volumes Time to maturity up to 1 year 4,569 3,158 191 1 7,919 Time to maturity up to 1 year 3,448 2,836 - - 6,284 Market values Dec. 31, 2006 Foreign exchange contracts Currency option transactions...

  • Page 200
    ... 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...

  • Page 201
    ... plans of which defined contribution pension plans 2006 2,804 636 104 220 3,440 2005 2,578 558 73 214 3,136 8 Total average employees for the year Domestic group companies Foreign group companies Overall of which apprentices 2006 45,179 7,118 52,297 2,031 2005 45,504 6,908 52,412 2,019 199

  • Page 202
    ... members of the Board of Management and Supervisory Board of Volkswagen AG, ! associates. The volume of transactions with the parent company Volkswagen AG and other subsidiaries which do not belong to the Audi Group is indicated by the following summary: EUR million Sales and services supplied to...

  • Page 203
    ..., to a lesser extent, design, training and other services and supplies of original parts. Business to related parties comprises for the most part sales of new and used cars, engines and components. Members of the Boards of Management or Supervisory Boards of Volkswagen AG and AUDI AG also belong to...

  • Page 204
    ... on generally accepted market terms, in the way that is customary for transactions with outside third parties. EUR million 2006 External revenue 2005 2006 Internal revenue 2005 2006 Total revenue 2005 Germany Rest of Europe Rest of world Consolidation measures Audi Group 21,950 7,824...

  • Page 205
    ... 2006 2005 2006 Other non-cash expenses 1,522 270 130 -6 1,916 2005 Depreciation and amortisation Germany Rest of Europe Rest of world Consolidation measures Audi Group 2,027 417 71 - 2,515 1,607 273 50 - 1,930 1,700 199 249 - 397 1,751 Revenue by region Share 2006 EUR million % 29.2 49...

  • Page 206
    ... rights only three times a year, during four-week exercise periods, each of which commences on a public reporting date of Volkswagen AG. The share options plan is thus centred on demanding, relevant comparative parameters in the spirit of the German Corporate Governance Code. Further details are...

  • Page 207
    ... - pursuant to Sections 285 Sentence 1 No. 10 of the German Commercial Code and 125 Para. 1 Sentence 3 of German Stock Corporation Law - are indicated in the Notes to the financial statements of AUDI AG. The basic features of the Supervisory Board´s remuneration are laid down in Section 16 of the...

  • Page 208
    Events occurring after the balance sheet date No events which must be reported according to IAS 10 occurred after December 31, 2006. Ingolstadt, February 13, 2007 The Board of Management 206

  • Page 209
    ... 6 Principal group companies Name and registered office AUDI AG, Ingolstadt Audi Australia Pty Ltd., Botany (Australia) Audi Brasil Distribuidora de Veículos, São Paulo (Brazil) AUDI DO BRASIL E CIA., Curitiba (Brazil) AUDI HUNGARIA MOTOR Kft., GyÅ'r (Hungary) Audi Japan K.K., Tokyo (Japan) Audi...

  • Page 210
    ... A3 1.8 TFSI Audi S3 Audi A6 Avant 2.7 TDI Audi S6 Audi Q7 3.0 TDI Audi S8 Audi A8 W12 quattro Audi A8 L W12 quattro Audi R8 Lamborghini Gallardo Coupé Lamborghini Murciélago LP640 Coupé Ibiza Cupra 1.8 20V T * continuously variable Key: M: manual gearbox A: automatic transmission 118 195 132...

  • Page 211
    ... Cars Engines Vehicle sales Audi Germany Outside Germany Outside Germany Market share, Germany Lamborghini Other Volkswagen Group brands Employees Revenue Cost of materials Personnel costs Personnel costs per employee Depreciation and amortisation Profit before tax Profit after tax Share price (year...

  • Page 212
    Vorsprung durch Technik www.audi.com AUDI AG 85045 Ingolstadt Germany Phone +49 (0)8 41 89-0 Fax +49 (0)8 41 89-3 25 24 email [email protected] Finance Analysis and Publications I/FF-12 Phone +49 (0)8 41 89-4 03 00 Fax +49 (0)8 41 89-3 09 00 email [email protected] Communication I/GP Phone +49 (0)8 41 89...