Audi 2006 Annual Report Download - page 145

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The German car market
The German car market experienced very mixed fortunes in the course of the year, and there
were sharp fluctuations in the month-by-month registration totals. Towards the end of the
year, the prospect of a rise in the VAT rate on January 1, 2007 became noticeable, with pri-
vate customers bringing forward vehicle purchases, particularly during November and De-
cember; this prompted a marked acceleration in demand for passenger cars. New registra-
tions of vehicles in Germany totalled around 3.5 million, representing an increase of 3.8
percent.
Following a downturn in sales in the previous year, diesel models came back into favour
with buyers in 2006. The diesel share of total first-time registrations rose by 1.6 percentage
points to 44.3 percent. This development was prompted in particular by the broader range
of models with diesel particulate filters.
Domestic car production grew, not least because of the rise in demand from abroad.
With 5.4 million vehicles built, German manufacturers bettered the previous year’s total by
0.9 percent. The number of German-branded cars built abroad was 12.2 percent up on the
previous year, at 4.7 million units.
German manufacturers again improved on the previous year’s record-breaking car ex-
ports. 3.9 million passenger cars, an increase of 2.6 percent, were exported. The countries of
Western Europe were the most important sales region; in view of the weaker market devel-
opment in those major markets, the 2.4 million cars supplied to those markets was down 3.6
percent on the previous year. On the other hand, new models gave a boost to exports to the
USA. Around 555,000 German-built cars were sold in the United States, a gain of 1.6 percent.
Overall assessment by the management
Competition in the car sector gained in intensity in 2006. The rising cost of mobility, driven
primarily by higher fuel prices, dented vehicle sales in many car markets. Meanwhile, higher
prices for raw materials and energy created greater pressure of costs at the procurement
end.
In order to safeguard and boost competitiveness in the long term, the Audi Group is
working towards securing a lasting improvement in its own productivity. In an effort to real-
ise ongoing advances in productivity, the company is concentrating first and foremost on
refining its established, successful approach 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 of the sustain-
ability of the measures taken.