Audi 2007 Annual Report Download

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PASSION
Success formula for a mobile lifestyle
Rocker’s Snaps
Multitalent Bryan
Adams photographs
the Audi A4
Talkmaster’s Hobby
Tonight Show’s Jay
Leno and his iconic
automobiles
Engineer’s Vision
Why future Audi
models will be even
more fuel-efficient
2007 ANNUAL REPORT
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Table of contents

  • Page 1
    Rocker's Snaps Multitalent Bryan Adams photographs the Audi A4 Talkmaster's Hobby Tonight Show's Jay Leno and his iconic automobiles Engineer's Vision Why future Audi models will be even more fuel-efficient 2007 ANNUAL REPORT PASSION Success formula for a mobile lifestyle

  • Page 2
    ...Figures 2007 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 Return on investment Capital investments Development expenditure recognized as an intangible asset...

  • Page 3
    ... to ensure Audi's competitive edge. Through innovation, a global mindset and a sense of responsibility. Our understanding of progressiveness expresses itself in everything driving the brand with the four rings. And it does so with great success. Once again, our 2007 Annual Report not only describes...

  • Page 4
    The Board of Management Ralph Weyler, //// Dr. Werner Widuckel, //// Frank Dreves, //// Ulf Berkenhagen Marketing and Sales Human Resources Production Purchasing

  • Page 5
    Rupert Stadler, Chairman of //// Axel Strotbek Michael Dick the Board of Management Finance and Organization Technical Development

  • Page 6
    Report of the Supervisory Board Prof. Dr. rer. nat. Martin Winterkorn Chairman of the Supervisory Board The year 2007 was another successful year for Audi. The Group achieved its best production figures and posted its 12th unit sales record in succession. It also improved key financial performance...

  • Page 7
    ... its work on important growing markets such as China, India and Russia. The Supervisory Board remains committed to supporting the realization of the ambitious goals the Audi Group has set for itself. Accordingly, the Supervisory Board will continue to assist the Board of Management actively and...

  • Page 8
    ... had the crew rearrange the spotlights and reflectors. Again and again, models had to change position until, finally, they and the silver Audi A4 Sedan* were in harmony. For Panitz, even the most minute detail counts. Cover photo and page 86 Making-of Igor Panitz XXXFotograf, New York, USA XXXNebel...

  • Page 9
    ... the America's Cup. World-class sailor Jochen Schümann and Axel Strotbek, Member of the Board for Finance and Organization of AUDI AG, met her in the Audi wind tunnel. Pages 122 and 130 Wladimir Kaminer Bestselling author Berlin, Germany Without speaking a word of German, Wladimir Kaminer arrived...

  • Page 10
    ...a city to watch 36 PANORAMA The world's first Audi terminal opens in Sydney 130 "BUSINESS IS LIKE SPORT" Axel Strotbek, Member of the Board for Finance and Organization of AUDI AG, talks to sailing star Jochen Schümann 132 AT A GLANCE Figures of the Audi Group 133 AUDI GROUP FINANCES 2007 232 FUEL...

  • Page 11
    ...world rankings 118 THE CONQUEROR Mattias Ekström second-time German Touring Car champion 120 A QUESTION OF STYLE Olympic equestrian events at the Hong Kong Jockey Club 122 A RIGHT ROYAL SHOWDOWN The international sailing elite meets at the Audi MedCup 126 PANORAMA American Le Mans Series 4 DESIGN...

  • Page 12
    ... SHOW Jay Leno, Hollywood's most avid car collector PAGE 64 ICKX AGAINST ICKX An eco-duel for two racers PAGE 110 270 NEW RAÚLS The Real Madrid academy shapes the soccer stars of the future PAGE 48 ARTS & ARTISTS PAGE 22 MARKETS & MOVERS PAGE 110 SPORT & ATHLETES PAGE 64 TECHNOLOGY & RESEARCH

  • Page 13
    ... & CREATIVITY Photos: John Lamm, Montserrat/Genin/Focus, Enver Hirsch, Angelo Cavalli/gettyimages, Bryan Adams (2) PAGE 86 DESIGN & CREATIVITY PAGE 96 ESSENCE OF THE MOMENT Portrait of rock star Bryan Adams PAGE 86 A DIFFERENT VIEW Fashion legends, video artists and rock stars photograph ...

  • Page 14
    ... India joins the league of economic powers 20 RESPONSIBILITY AS A CORPORATE VALUE Audi takes on global responsibility with social projects 22 BETWEEN BUSINESS AND BOHEMIANS Audi Chairman Rupert Stadler visits Beijing 28 FACES OF A CITY Ingolstadt is a city to watch 36 PANORAMA The world's first Audi...

  • Page 15
    Photo: Bialobrzeski/laif Markets & Movers

  • Page 16
    ... from all over the world to trace his country's rise to economic power status. I was last in New York at the end of September 2007. My visit was timed to coincide with the annual session of the United Nations General Assembly where Sonia Gandhi, the President of India's ruling Congress Party...

  • Page 17
    ... is a country whose economy grows by some nine percent annually on average, and whose young IT talents are highly sought by global corporations. A country where even farmers with ox-drawn carts use cell phones. "Now every global corporation is investing in India or looking for a way into the market...

  • Page 18
    ... by the high caliber of Indian managers. He has spent much of his working life abroad, but when Vodafone acquired Hutch Essar in India a year or so ago, he returned to the country of his birth. "The managers of the company we had acquired were truly the equal of the best in the world," he remembers...

  • Page 19
    ... building activity (2007 set to rise five-fold by 2015 annual rise in demand for cars in 2007. There are vehicles every 1,000 15 motor for inhabitants THE ECONOMY IN FIGURES 1.12 bn 827 bn 31% 20 bn 16 % Source: German Federal Office for Foreign Trade, German Foreign Office 11 million...

  • Page 20
    ...reflection of Talented young people a greater global interest in India. Nandan Nilekani, Co-Chaiman of software company Infosys Of course, that's not entirely true. Just on the basis of the his ///////name he //////is ////one /////////of /////the number of people who recognize son's talent...

  • Page 21
    ... all the more important because in a few years we will be buying for 1.5 million vehicles. Building structures and processes to accommodate purchasing on this scale will not be child's play. Ulf Berkenhagen, Member of the Board for Purchasing of AUDI AG universities and colleges train a total of...

  • Page 22
    ... legal requirements. For example: In addition to the standard occupational health checkups, the medical department offers a comprehensive diagnostic program for all employees, who can use the service free of charge during working hours of their own accord. "The acceptance rate for the 'Audi Checkup...

  • Page 23
    ... Lewis supports the Kennedy foundation "Best Buddies," here with board member Katie Meade. community initiatives at the German locations. Each year, in addition, the Company tops up the employees' contributions. As a company with a worldwide presence, Audi believes it has a global responsibility...

  • Page 24
    22 MARKETS & MOVERS A keen sense for a growth market: Rupert Stadler and Zhu Yanfeng in front of the new National Theater.

  • Page 25
    ...closer inspection. It is the only country in the world with the potential to overtake America as the world's largest car market in the next decade. FAW and Audi have successfully worked together here for 20 years, in a joint venture based in Changchun in Northern China. Zhu and Stadler have decided...

  • Page 26
    ... Audi's numerous cultural sponsorship events. Audi has been chosen to supply the Official Premium Car for the Olympic Games, and Stadler and Zhu agree that China will benefit enormously from the Olympics. "All major sporting events help a country progress," says Zhu. They both step into the largest...

  • Page 27
    ... National Theater is one of the most ambitious building projects in modern China. Left Building boom: Glass-walled office towers, luxury apartment blocks and shopping centers increasingly dominate Beijing's skyline. An in-depth dialog: China's ascent shapes the lives of both Zhu and Stadler. Right

  • Page 28
    Above Dubbed the Bird's Nest: The new Olympic Stadium is a net woven from steel. Below Breaking ground, breaking through: The Olympics are bringing fresh impulse to China.

  • Page 29
    ...and they make the world go faster," answers Zhu. "How about you?" "To me, the car is a product Xu Jianyi, President of China FAW Group Corporation Leadership change: A new President for our Chinese joint venture partner On December 27, 2007, Zhu Yanfeng was named ViceGovernor of the Jilin Province...

  • Page 30
    28 MARKETS & MOVERS Faces of a city The people of Ingolstadt make it the prospering city on the river Danube. The dynamic region is marked by a high quality of life, strong economic growth and a cosmopolitan feel. COPY Karin Michaelis PHOTOGRAPHY Bert Heinzlmeier, Peter von Felbert Café Moritz ...

  • Page 31
    ...the best way to shake off the weekday stress," says Terttu Pietilä. As a European delegate to the World Federation of Neurosurgical Societies, her presence is often required at overseas conferences. She performs 1,500 operations a year, and her team includes colleagues from nine different countries...

  • Page 32
    View of city gate and cathedral Street life 01 02 03 Tagtraum, student café 04 The Lechner museum 01 03 02 04

  • Page 33
    ..., he eventually moved to Europe in 1992, attracted by the culture. No doubt about it, this 1,200-year-old fortified city is certainly brimming with cultural history. "Just yesterday, I rediscovered two old house doors with amazing decorations," enthuses the reporter from Toronto. Ottmar Engasser...

  • Page 34
    ... lot of Georgian culture in her beautiful house at the edge of the city, it is clear that Teona Chkheidze has long felt very much at home in Ingolstadt. "Here, you're not just a number like in a big city," she explains. There's also the weekly market, where cut flowers shine out from rows of buckets...

  • Page 35
    01 03 02 04 Asam church Shopping 01 02 03 Weekly market at the city hall Bridge over the Danube 04

  • Page 36
    .... For Gorazd Ocvirk these are the scents of a summer evening in Ingolstadt, when an extended Turkish family mingles with German neighbors and a gang of university students around the local lake. "A multi-cultural society in the open air," smiles the young Slovenian, who is writing his doctorate...

  • Page 37
    ... other. Ingolstadt combines the opportunities found in a big city with the manageability of a small town, which is why its economy boasts many success stories. Not only Audi, blazing from one sales record to another. Another local company which is now a global player is the Media Saturn Group. The...

  • Page 38
    ... look: The opening of the world's first Audi terminal in Sydney, Australia, marked the presentation of the new architectural concept, which can be adapted to fit into almost any urban context. The terminals, usually multi-story, sport a curve carved into the facade, story-high windows, thus creating...

  • Page 39
    ... Businesses need to set new standards in helping disabled people integrate into the world of work. Last year, Bavaria's State Ministry of Welfare and Social Affairs recognized AUDI AG's efforts in the field, presenting the company with the "Job Success 2007 - Disabled People in the Workplace" award...

  • Page 40
    ... RUSSIANS Wladimir Kaminer on mobility in Soviet times 44 CONCERT IN MOTION Essay by Dieter Meier 46 MODERN CLASSICS The Audi Summer Concerts present superstars from the world of classical music 48 ONE FOR THE ROAD, TWO FOR THE SHOW Jay Leno, Hollywood's most avid car collector 52 PANORAMA Premiere...

  • Page 41
    Arts & Artists Foto: Tim Gutt

  • Page 42
    40 ARTS & ARTISTS

  • Page 43
    ... likely joined the queue for a car in 1945, right after the end of World War II. Decades later, he had forgotten his dream of a car, when suddenly, just before his 80th birthday, he received a call telling him he could pick up the car allocated to him. "Come to Branch Number 108 on Friday at nine...

  • Page 44
    .... Every driver in the city always seemed to know where the market was going to be held - an extraordinary feat, given that there was no internet or cell phones in those days. My friend Andrej bought parts there for his Moskvitch. They didn't come direct from the factory, but from talented tinkers...

  • Page 45
    ARTS & ARTISTS 43

  • Page 46
    ... an engine hitting the high C, has mostly faded into the powerful silence of the modern power plant, which offers today's drivers such a wide range of driving styles. When I drive a high-performance car at low speeds, only a faint hum reminds me of the multitude of parts moving under the hood, with...

  • Page 47
    ...then, the duo have sold around records 14 //////million In 2007, Yello wrote the music for the launch of the Audi A5 Yello's highly creative videos are also the work of Meier years ago extra Several this vagant globetrotter opened an organic farm in Argentina a in /////Zurich and...

  • Page 48
    ... Each year, international superstars from the world of classical music perform at the Audi Summer Concerts - now a wellestablished feature on the musical calendar. COPY Axel Brüggemann he word classic means "time- less," but also denotes a contrast between the modern and the traditional. The...

  • Page 49
    ... to future generations and to develop a sense of tradition - always with the aim of achieving innovation and renewal through passion. Over recent years, classical music has radically changed its marketing strategy. It has become open to the world, and knows what strengths it can play to, Above...

  • Page 50
    ...Leno is not just one of America's best-known late night talk show hosts. He is also Hollywood's craziest car collector. Vintage cars, exotic motors and dream sports cars - he has devoted almost his entire life to the automobile. His latest "ride" is an Audi R8. COPY Jeremy Hart PHOTOGRAPHY John Lamm

  • Page 51
    ... since the silver screen and the internal combustion engine grew up together - changing the way the world traveled and the way the world was entertained. Little wonder then that Los Angeles, the home of Hollywood, is an automotive epicenter in global terms. None of Hollywood's royalty compares...

  • Page 52
    ... challenging to drive, but pre-World War I technology is not the most reliable. Leno's obsession (and obsession is not too strong a word) arose in 1959, when he was nine years old, from a chance meeting with a man in a classic British sports car parked outside a barn near his parents' home. "It was...

  • Page 53
    ...The rich sound of the engine, the sound of the air intake, the growl of the exhaust, it's a knockout." /// "But you notice the car's real quality when you drive it. Its handling is precise and sensitive. The allwheel drive keeps the power cleanly on the road." /// "At the end of the day there's noth...

  • Page 54
    ... and music lovers from all over the world. Last year, the Schleswig-Holstein Music Festival, with the support of Audi, offered around 150 musical events to the international classical music scene. Every year the spotlight falls on a different country, so that audiences can gain a full appreciation...

  • Page 55
    ...its colorful motif of a woman could be seen high above Lake Constance until the end of August 2007. Win an A4 The newly-crowned German Touring Car Masters (DTM) champion, Mattias Ekström, paid a visit to the set of one of Germany's most popular TV programs. In the November edition of "Wetten, dass...

  • Page 56
    ... EFFICIENCY REVOLUTION Audi faces the climate offensive with innovative technology 64 ICKX AGAINST ICKX An eco-duel for two racers 68 INQUIRING MINDS In every engineer there's a Gyro Gearloose 72 EVERY DAWN BRINGS A NEW FUTURE Writer Frank Schätzing on tomorrow's world 76 INSPIRED BY NATURE How car...

  • Page 57
    Photo: stone/gettyimages 3 Technology & Research

  • Page 58
    56 TECHNOLOGY & RESEARCH TRAVOLUTION Intelligent traffic light systems in cities result in lower CO2 emissions. The efficiency revolution ALTERNATIVE FUELS ENGINES GEARBOXES CO2 reduction through powertrain optimization. Biofuels of the future could considerably decrease CO2 output.

  • Page 59
    ..., high performance: With state-of-the-art powertrain systems, intelligent onboard electronics and innovative energy management, Audi combines respect for the environment with sports-car performance. COPY Thomas Ramge DRIVING PLEASURE Sportiness and dynamics are preserved. Energy-efficient...

  • Page 60
    ... exactly when to change gear. It's part of his job. At the Audi test circuit just outside Ingolstadt, the Head of Vehicle Testing has great fun demonstrating just how the new electronic shift recommendation works. If the engine is straining slightly too hard in a lower gear, the blue light on the...

  • Page 61
    ... in these areas, but the efforts made in the engine department need to be combined with other measures, because 19 percent of energy is eaten up by the powertrain, i.e. transmission, tires, wheel bearings and power steering pump. Air conditioning and electrics demand a further eight percent. Weight...

  • Page 62
    60 TECHNOLOGY & RESEARCH THE WORLD'S CLEANEST DIESEL For the foreseeable future, it is diesel technology that can make the largest contribution toward reducing CO2 emissions. The world's cleanest diesel technology, to be introduced by Audi from mid-2008, will combine TDI engines with what is known...

  • Page 63
    ... of the intake temperature. ENHANCED EXHAUST GAS RECIRCULATION SYSTEM The advanced exhaust gas recirculation system significantly lowers exhaust gas emissions. COMBUSTION CHAMBER PRESSURE SENSOR The world's first sensor of its kind allows even more precise control of engine combustion processes.

  • Page 64
    ... most part failed to ensure a good flow of traffic in their cities up to now. There are technical reasons for this: Modern traffic light systems are rather inflexible. Also, progressive signal systems that let traffic flow on thoroughfares thanks to serialized green lights create no overall benefit...

  • Page 65
    ... 19 % engine: Friction, gas exchange and combustion B Michael Dick, Member of the Board for Technical Development of AUDI AG 19 % powertrain: Transmission, tires, wheel bearings, power steering pump Economically sporty. Efficiency marks Audi's development effort. Quality - Audi being a premium...

  • Page 66
    64 TECHNOLOGY & RESEARCH A versatile duo: Professional racing drivers Jacky and Vanina Ickx

  • Page 67
    ... the abbey is now part of the "green lung" of Brussels. The test cars are two extremely energy-efficient Audi A3 BRUSSELS Route: 40 km 05 Shopping: The chocolates for the winner will be bought in the historic downtown. Looking for a parking space costs fuel. Lunch break: The best French fries in...

  • Page 68
    ... shift indicator which tells them the most fuel-efficient gear to drive in. A gear shift indicator informs the driver when he needs to change up or down, enabling him to utilize the car's full potential. The aim is to keep the engine rotating at the ideal speed at all times. Once familiar with the...

  • Page 69
    ... in the highest ball of the Atomium, the diesel engines start up again. The green duo are now homing in on the Audi plant in Forest. Jacky takes a glance at his fuel consumption gauge: Much too high! Little wonder - after all it has been pretty much city traffic all the way. But the ring road...

  • Page 70
    68 TECHNOLOGY & RESEARCH A born engineer: Cederic Schäfer from Aachen builds machines and small robots.

  • Page 71
    ... projects, regularly travel abroad and ideally speak several foreign languages. One example is Petra Kim-Reschke, head of Audi's dual-clutch transmission mechanical testing department in Ingolstadt. She has a degree in engineering and used to work for an Asian car manufacturer. She speaks

  • Page 72
    ... shouldn't go into engineering just because of career prospects, but mostly because they are curious and enjoy meticulous work." Petra Kim-Reschke, Head of Mechanical Testing of Dual-clutch Transmissions, AUDI AG Compromise? Would Batman, another highly talented technological wizard, settle for...

  • Page 73
    ...specialist staff are required, particularly in Germany's flagship industries such as automobile manufacturing and engineering. Cederic Schäfer needed no external encouragement. Dr. Werner Widuckel, Member of the Board for Human Resources of AUDI AG Premium-class HR work means making Audi the most...

  • Page 74
    ... & RESEARCH Every dawn brings a new future Frank Schätzing is one of Germany's most successful contemporary writers. He rose to fame with his thriller "The Swarm," set to hit the screens in 2009 as a Hollywood movie. In this interview, Schätzing talks about responsibility, fear and the world of...

  • Page 75
    ... question of educating the public only comes in when I transport horror into the real world. Although at this point, you do start to take on a certain responsibility. After all, if I want to write about natural disasters in a credible way, I know I will need to do a lot of research on my own because...

  • Page 76
    .... In the book reconciliation prevails. In the real world, a happy ending and global peace seem to be impossible. Why are we failing? It's funny, but I hardly have any fears. My only real vision of fear is of losing my powers of reason, that I might start going crazy. That the specters hidden deep...

  • Page 77
    ... are halfhearted solutions. To what extent should we allow public opinion to influence our work? successful, by creating attention, conveying their strengths in a gripping, convincing way. The product itself is a question of belief. No marketing department in the world can sell something that...

  • Page 78
    76 TECHNOLOGY & RESEARCH

  • Page 79
    Inspired by nature The car industry has long seen nature as a source of inspiration for functional and design ideas. Engineers are now looking to nature for two things especially: Saving weight and saving energy. COPY Klaus Jopp

  • Page 80
    ... it comes to optimizing notional fuel efficiency, a penguin could travel aeroand hydrodynamics, nature is truly amazing 2,000 Take the for penguin example Its //////body ///////////is /////perfectly between 1,500 ///////////and kilometers under water on one liter of fuel. "Penguin design...

  • Page 81
    ... knots and the supporting effect of light tensile surfaces between them," says Dr. Claus Haverkamp, Head of Car Body Structure Development at Audi. "Researchers have copied a great deal from nature, such as the structure of the bamboo plant, the dragonfly or the water lily." Here, high rigidity and...

  • Page 82
    ...TECHNOLOGY & RESEARCH the weight of the dragonfly's wings makes up just The dragonfly principle. The gossamer-thin wings of a dragonfly are crisscrossed with a dense network two percent of its total body weight at most. Audi of veins These combine high //////////solidity maximum engineers...

  • Page 83
    ... offer the customer an attractive, premium-quality product at a competitive price. This requires not only an attractive product design and superior features, but also optimal utilization of the available manufacturing capabilities and the establishment of efficient, supported manufacturing methods...

  • Page 84
    ..., production technology, IT, engineering and business and social sciences. Over the past year, researchers worked on approximately 100 doctorate projects of which 63 were part of the research partnership. Apart from the universities already listed, Audi also works with Ingolstadt University...

  • Page 85
    ... international design competition in which elite teams from all over the world develop prototypes for a single-seater racing car which then race against each other. The Audi Contest was initially established in order to actively support young engineers. 19 teams competed for scientific and financial...

  • Page 86
    ... OF THE MOMENT Portrait of rock star Bryan Adams 98 THE STRADIVARIUS CODE Violin maker Stefan-Peter Greiner seeks the perfect sound 100 SENSE AND SENSUALITY Visit to the Lamborghini leather workshop 104 THE MEDAL MAKER Xiao Yong, designer of the medals for Beijing 2008 106 PANORAMA 2007 awards

  • Page 87
    Photo: Soren Sölker Starbird 4 Design &Creativity

  • Page 88
    ...A different view In real life, they create images of people or record music videos. Some rather unusual photographic artists give us their very special views of Audi's new models. THE AUDI A3 CABRIOLET*, AS SEEN BY IGOR PANITZ *Fuel consumption and emission figures at the end of the annual report.

  • Page 89

  • Page 90
    88 DESIGN & CREATIVITY *Fuel consumption and emission figures at the end of the annual report.

  • Page 91
    THE AUDI TT ROADSTER*, AS SEEN BY TIMOTHY SACCENTI

  • Page 92
    THE AUDI A5, AS SEEN BY GABO

  • Page 93
    DESIGN & CREATIVITY 91 THE AUDI R8, AS SEEN BY KARL LAGERFELD

  • Page 94
    THE AUDI RS 6 AVANT*, AS SEEN BY JAN VON HOLLEBEN

  • Page 95
    DESIGN & CREATIVITY 93 *Fuel consumption and emission figures at the end of the annual report.

  • Page 96
    94 DESIGN & CREATIVITY THE AUDI A4 SEDAN*, AS SEEN BY BRYAN ADAMS WATCH THE SLIDE SHOW Find out how the photographs for were /////////"A /////different view taken Go to www.audi.com/ar2007/creative

  • Page 97
    ... word. The six-man crew worked with indirect light effects and projections. The movements are "painted" in the air by the people who held up the light sources. "It created a kind of ballet," says Saccenti. The light moves over the smooth surface, creating an impression of speed and energy. THE AUDI...

  • Page 98
    ... & CREATIVITY The essence of the moment This successful rock musician from Canada is also known for his direct, no-frills manner. A direct approach also characterizes his photography. Bryan Adams will appear at the Audi Open Air concert in Ingolstadt on July 12, 2008, featuring songs from his new...

  • Page 99
    ... guest Bryan Adams at the world premiere of the Audi A4 at the Frankfurt Motor Show 2007. the time. Since then, he has never left the charts. Ten studio albums are out so far, contributions to 42 soundtracks and countless singles: "Cuts Like a Knife," "18 Till I Die," "Summer of '69," "Heaven...

  • Page 100
    ...room for the workplace of a "King of Sound." Greiner makes violins, and enthusiast critics have taken to dubbing him the "new Stradivarius." Violin making is romantic - and so is Greiner. The 41-year-old craftsman drives a vintage car and wears white shirts with stand-up collars, of which Beethoven...

  • Page 101
    ..., but points out that what makes his craftsmanship special is the way it blends tradition and modernity. His methods are extremely scientific. He turns around, reaches for a couple of paper printouts and lays them Photo: AUDI AG The fingertips are calloused and cracked, and the reasons are right...

  • Page 102
    100 DESIGN & CREATIVITY Sense and sensuality Leather - the scent of luxury. At Lamborghini and in the factory of shoemaker László Vass, this exquisite natural material is ennobled by master craftsmanship. COPY Zoltán Tarpai PHOTOGRAPHY Sandro Michahelles

  • Page 103
    .... There is practically nothing on a dashboard that can't be upholstered. For example, the whole structure can be covered with leather, even tiny details such as the individual slats of the air vents or the switch panels. In the work area, all you can hear is the cutting of knives, the clatter of...

  • Page 104
    ..., cutting and punching tools. "In my trade, what matters is the delicate perfection of details, and although you can do a lot with machines, we stick with the traditional methods," says Vass. Leather samples are stacked high on the tables in the Centro Stile (styling center). One beneficial quality...

  • Page 105
    ...are typical of this Italian car manufacturer. Leather needs peace and quiet. Only the whirring of sewing machines can be heard in the upholstery workshop. 02 08 03 Upholstering a car seat takes several hours. The sign of the bull: Only the best will do. Lamborghini leather needs to be inherently...

  • Page 106
    ...for a telecommunications company. Over the past 15 years, Xiao has styled around 250 brands and company logos, not forgetting posters for businesses and a large number of events. Galleries and museums are already collecting his work, and he has received over 40 international design awards. But Xiao...

  • Page 107
    ... and a light-filled courtyard. This is where Xiao retreats to work on his design Ralph Weyler, Member of the Board for Marketing and Sales of AUDI AG Visionary brand architecture: The Audi terminal Audi - a brand name that stands for strong brand values. Worldwide, our customers have come to...

  • Page 108
    ...the world." In November, the new Audi A4 received the "Golden Steering Wheel," the award which the German Sunday paper Bild am Sonntag (edition 45/2007) presents to the best new car each year. In the reader polls run by auto motor und sport (edition 4/2007), the A3, the A6 and the Audi Q7 all picked...

  • Page 109
    ... model into the Audi world. It combines dynamic styling with exemplary economy of space. Thanks to innovative hybrid technology, the prototype only requires 4.9 l of premium fuel, while the 1.4 l TFSI engine delivers an extremely sporty 150 hp. The electric motor can power the Audi A1 project for...

  • Page 110
    ...top of the world rankings 118 THE CONQUEROR Mattias Ekström second-time German Touring Car champion 120 A QUESTION OF STYLE Olympic equestrian events at the Hong Kong Jockey Club 122 A RIGHT ROYAL SHOWDOWN The international sailing elite meets at the Audi MedCup 126 PANORAMA American Le Mans Series

  • Page 111
    Photo: Florian Geiß 5 Sport &Athletes

  • Page 112
    ... comes to youth soccer. On the outskirts of the city lies one of the world's largest soccer training centers. COPY Alexander Gutzmer PHOTOGRAPHY Montserrat Velando, Genin Andrada T he ultimate role model is everywhere. When the eight-year-old boys arrive at the club's training ground in the early...

  • Page 113
    The importance of ball possession: The youngsters already train four times a week.

  • Page 114
    ...point, although their lives are already ruled by soccer. Four times a week, they train at the new hi-tech camp, opened outside Madrid in 2005. The boys are bussed from the city center... they are practicing. "Tactics training starts early. Kids learn fastest at a young age," says Míchel. The club's ...

  • Page 115
    ... Real's internationally successful basketball team ...the Ciudad Real Madrid is to become a world-class sports complex, covering no less than 125 hectares. Alexander Gutzmer is a business writer who has been covering management and brand creation in professional soccer for years. • The car for...

  • Page 116
    Pit stop: During driver and tire changes every maneuver has to be just right. Every second counts Le Mans is legendary. The 24-hour race is associated with destiny, defeat, adrenalin and drama, thrilling duels and great victories. Defending champions Audi again managed to secure victory at the 2007...

  • Page 117
    ... race number 1 faced the challenge admirably, covering a distance of 4,981.5 kilometers over 369 laps. Never before was the 24-hour race as thrilling as in 2007. Audi had fielded three diesel-powered R10 TDI sports cars to repeat the previous year's historic first victory of a diesel-powered vehicle...

  • Page 118
    116 SPORT & ATHLETES Going for broke She is not afraid to make mistakes and likes to push herself to the limit. Determined Lorena Ochoa is the first Mexican to top the world rankings in ladies' golf. Here, she talks about mental strength.

  • Page 119
    ... Sports Award for the first time in 2001, Mexicans suddenly became much more interested in golf. My father is the reason for my great love for the sport as he took me with him to the golf course when I was young. You started playing at the age of five, winning your first regional tournament one year...

  • Page 120
    118 SPORT & ATHLETES The Conqueror He's done it! Swede Mattias Ekström won a gripping final race to become the overall winner of the German Touring Car Masters (DTM) for the second time after 2004. Portrait of a fighter for whom fair play and good sportsmanship come first. COPY Thomas Voigt

  • Page 121
    ... is editor of the official DTM year books. is Mattias Ekström's favorite number. At last, he's won it back - on the hood of his Audi. This is his second German Touring Car Masters (DTM) victory, after 2004. He triumphantly brought the title back home. His body is honed to perfection, his reaction...

  • Page 122
    ...race days. The club will host the riding events at this summer's Olympic Games. The atmosphere at evening races in Happy Valley is electric. sionate about performance, people are used to dealing in superlatives. For the club's racehorses, only the best in the world, the most talented will do. First...

  • Page 123
    ...is not recommended by a club member will not get in. Only a very few applicants are accepted each year. This noble group of horse enthusiasts is shielded from envious critics by the club's unique financial structure. Since the mid1950s, the club has invested all its surpluses into community projects...

  • Page 124
    122 SPORT & ATHLETES A right royal showdown Sleek, hi-tech yachts, world-class sailors and royal splendor: The Audi MedCup, one of Europe's most challenging regatta series. Also on board: Audi and two-time America's Cup champion Jochen Schümann. COPY Tatjana Pokorny PHOTOGRAPHY Heinrich Hecht

  • Page 125
    ...'s Cup has come to a standstill because of an ongoing legal battle, the international sailing elite has switched to an alternative arena: The Audi MedCup, where the world's best sailors compete in the most exclusive waters of the Mediterranean, on TP52 yachts. Last year, Audi was already a premium...

  • Page 126

  • Page 127
    ... racing yachts. As in the world of motorsport, they offer technology companies the chance to test out new products and equipment arrangements. Hulls, masts, wheels and tillers of TP52 yachts are made from carbon fiber, for example. The sails are "baked" from ultra-light fibers. A single spinnaker is...

  • Page 128
    ... 01 Pole position: Audi maintained its command of the American Le Mans Series. 01 American Le Mans Series 02 Audi quattro Cup world finals Audi in 13th overall victory At the final race of the American Le Mans Series in Laguna Seca (California), the Audi R10 TDI diesel race car brought home its...

  • Page 129
    ... the Audi driving experience in the winter landscape demanded total concentration. They practiced maintaining control of the cars in extreme conditions on snow and ice. 02 Golf: World final of the Audi quattro Cup in Los Cabos, Mexico. 04 Audi Polo Challenge 2007 A royal victory The Audi Polo...

  • Page 130
    ..., Member of the Board for Finance and Organization of AUDI AG 130 "BUSINESS IS LIKE SPORT" Axel Strotbek, Member of the Board for Finance and Organization of AUDI AG, talks to sailing star Jochen Schümann 132 AT A GLANCE Figures of the Audi Group 133 AUDI GROUP FINANCES 2007 232 FUEL CONSUMPTION...

  • Page 131
    Photo: Benjamin Rondel/corbis Review

  • Page 132
    ...what both our jobs have in common. Whether it's sailing or being on the board of a large company like the Audi Group - success only comes if every team member puts in hard work. But apart from the mental challenge, I'd also relish the physical test. Sport has always been an important part of my life...

  • Page 133
    ...drive cars, and we love cars. In my current job, the opportunity to play an active part in shaping the future - that's a fantastic motivation. I also relate very strongly to technology. SCHÃœMANN: You try to achieve perfection. I've learned that Audi success story. 2007 was our twelfth record year...

  • Page 134
    ... global locations. VEHICLES from the Audi brand were sold to customers around the world. The increase of 6.5 % made 2007 the 12th consecutive record year. EUROS in sales revenue for the Audi Group in 2007 exceeded any previous year and reflects an increase of 7.9 %. RATE OF RETURN before...

  • Page 135
    2008 Financial Calendar Quarterly Report, 1st quarter 2008 April 28, 2008 Annual General Meeting May 7, 2008 Customer Center at Audi Forum Ingolstadt Interim Report July 25, 2008 Quarterly Report, 3rd quarter 2008 October 29, 2008

  • Page 136
    ... Management Report of the Audi Group for the 2007 fiscal year Business and underlying situation The Group Corporate steering Research and development Employee matters Audi in society Environmental aspects Economic environment Course of business Financial performance Net worth Financial position...

  • Page 137
    ... Annual Report, under "Details of the Supervisory Board and Board of Management." This information is also available on the Company's website (www.audi.com/notes). Declaration relating to the Code on the Internet The joint declaration of the Board of Management and the Supervisory Board of AUDI AG...

  • Page 138
    135 Audi Share Performance Stock market developments Under the influence of a robust global economy, outstanding financial performance by many companies and huge confidence among market players, the key international stock markets headed for new record highs in the first half of 2007. This ...

  • Page 139
    ...sustainability of the technology it uses. Customers experience this brand identity through a diverse range of models, which enabled Audi to further strengthen its good position on car markets worldwide in 2007. Audi vehicle sales by region 2007 Germany Europe excluding Germany China (including Hong...

  • Page 140
    ... sports cars. Vehicles of the Audi brand and of other Volkswagen Group brands are sold in Italy by VOLKSWAGEN GROUP ITALIA S.P.A., a subsidiary of Automobili Lamborghini Holding S.p.A., based in Verona. Main companies within the Audi Group AUDI AG AUDI HUNGARIA MOTOR Kft. Automobili Lamborghini...

  • Page 141
    ... law. Among other things, the law envisages changes to the German Commercial Code and necessitates additional particulars in the Management Report, which are provided below: Capital structure On December 31, 2007, the share capital of AUDI AG remained unchanged at E € UR 110,080,000 and comprised...

  • Page 142
    ... portfolio of measures designed to achieve this goal was again drawn up in fiscal 2007. All activities stemming from this annual planning process reflect a quartet of strategic aims: Audi - the most successful premium brand Volume growth to 1.5 million vehicles Customer enthusiasm and image...

  • Page 143
    ... the "2007 World Car Design of the Year" by a jury of renowned trade journalists from 22 countries. Numerous motor-racing successes once more underscored the brand's sporting credentials in 2007. Audi repeated the legendary triumph of its R10 TDI diesel-powered racing car in the Le Mans 24 Hours and...

  • Page 144
    ... number of employees in the Research and Development area averaged 6,211 (5,946) over the year, comprising 5,973 (5,717) at AUDI AG, 109 (99) at AUDI HUNGARIA MOTOR Kft. and 129 (130) at Automobili Lamborghini S.p.A. 1) trendence Institute: The 2007 Graduates Barometer - Business and Engineering...

  • Page 145
    ...impressive fuel efficiency and low pollution emissions, while at the same time delivering the sportiness customers have come to expect from Audi. This was made possible by the use of cutting-edge technologies in the field of gasoline and diesel direct injection, as well as by a comprehensive package...

  • Page 146
    ... convertible silhouette. Innovations for safety LED technology For several years now, the Audi Group has been working extremely successfully on refining LED technology. This offers particular advantages by comparison with conventional concepts. In addition to lower energy consumption and less...

  • Page 147
    ... (52,297) people worldwide in 2007. Despite the sharp rise in vehicle sales, the workforce of AUDI AG at its two locations in Ingolstadt and Neckarsulm remained on a par with the previous year at 44,698 (44,701). AUDI HUNGARIA MOTOR Kft. reported 5,623 (5,204) employees. Personnel growth was largely...

  • Page 148
    ... previous profit share, AUDI AG employees received an average performance-based bonus of EUR 3,700 in 2007 for the preceding fiscal year. Efficient suggestions award program The ongoing enhancement of products and working processes is one of the main pillars of Audi's huge success. The company-wide...

  • Page 149
    ... high standards of these research partners. Location-specific partnerships A company of Audi's caliber bears responsibility for more than just its employees. Audi also seeks to foster education and non-profit organizations. AUDI AG has joined forces with the City of Ingolstadt, other major companies...

  • Page 150
    ... which forms an integral part of the Audi Group strategy. In addition to prevention measures such as efficient resources management, the Company is contributing to major advances in protecting the environment through its many pioneering technological innovations, and proudly bears the European Union...

  • Page 151
    ... drive systems in the coming years. Further optimization of these drive concepts is therefore crucial. Audi has once again demonstrated its immense expertise in the field of ultra-efficient internal combustion engines through such developments as the progressive TFSI and TDI technologies. Audi...

  • Page 152
    ... other events. At the Shanghai Motor Show, Audi presented the Audi Cross Coupé quattro concept car with the specially configured Audi drive select featuring an "efficiency" driving program in addition to the "sport" and "dynamic" driving modes. This new mode modifies the engine map and shift point...

  • Page 153
    ... economies in emerging countries in Asia, Latin America and Central and Eastern Europe, which experienced very dynamic expansion. In the industrialized nations, the crisis prompted by the U.S. subprime mortgage market clouded the economic climate on international financial markets in the second half...

  • Page 154
    ... in world market prices for raw materials and food, which boosted the value of exports from this region. The emerging countries of Asia continued to experience dynamic economic growth. The pulse rate of the economy rose yet again in China. The growth rate for gross domestic product, for example, was...

  • Page 155
    ... industry in 2007 revealed sharp contrasts. Strong global economic growth sparked a rise in passenger car sales in many markets, in particular in emerging countries such as China and India. At the same time, however, car sales in the major volume markets of the U.S., Japan and Germany became...

  • Page 156
    ... consolidated cost of materials by Group company 16.9 % Other Group companies 66.2 % AUDI AG 16.9 % AUDI HUNGARIA MOTOR Kft. The persistently high price levels for raw materials and energy again presented Audi Group Purchasing with major challenges in 2007. Financial impact on profitability was...

  • Page 157
    ... vehicles during the past fiscal year. AUDI HUNGARIA MOTOR Kft. in GyÅ'r, Hungary, manufactured a total of 56,982 (23,683) vehicles thanks to the huge success of the new-generation Audi TT. The Audi A3 Cabriolet has been built in Hungary since November 2007 in partnership with the Ingolstadt plant.

  • Page 158
    ...will follow toward the end of the current fiscal year. Start of production for Audi A3 Cabriolet in GyÅ'r, Hungary AUDI HUNGARIA MOTOR Kft. began production of the new Audi A3 Cabriolet in November 2007. This model is being built in tandem with the Ingolstadt plant (body manufacturing and paint shop...

  • Page 159
    ...breaking year in succession last year, with vehicle sales up by 6.5 percent to 964,151 (905,188) units. Audi vehicle sales - largest markets Vehicle sales 2007 Year-on-year percentage change 2007 market share, percent Year-on-year percentage change in overall market Audi worldwide Germany China...

  • Page 160
    ...open-top version in the premium compact category to the public in November 2007. The new Audi A3 Cabriolet embodies supreme driving enjoyment and will be available with a choice of four powerful four-cylinder gasoline and diesel engines featuring progressive TFSI and TDI technology right from market...

  • Page 161
    ... technological innovations. In addition to the Audi brand, Italian super sports car manufacturer Lamborghini was extremely successful as well. Vehicle sales were higher than ever before in 2007. Sales of the Gallardo car line, which was extended to include the Superleggera model early in the year...

  • Page 162
    ... in European countries are expected to join by 2010. By the end of 2008, AUDI AG will have invested some E € UR 50 million in its comprehensive qualification program and thus in the efficiency of the dealer network as well. Financial performance The Audi Group grew its revenue in fiscal 2007 by an...

  • Page 163
    ...343) million, representing a sharp year-on-year rise of 26.0 percent. Key earnings data % Rate of return before tax Equity return after tax Return on investment 2007 8.7 21.7 18.6 2006 6.2 20.1 14.2 The Audi Group's highly profitable growth is also reflected in all key return ratios. The rate of...

  • Page 164
    ...in fiscal 2007. The overall volume of capital investments rose to EUR 2,115 (1,925) million, mostly as a result of higher product investment. Property, plant and equipment accounted for EUR 1,527 (1,256) million of this total, representing a rise of 21.6 percent. The equity of the Audi Group rose by...

  • Page 165
    ... position The Audi Group increased its cash flow from operating activities by an outstanding 10.1 percent to EUR 4,876 (4,428) million in fiscal 2007. The cash used in investing activities equaled the previous year's high level at E € UR 2,419 (2,442) million. Investments in property, plant...

  • Page 166
    ...where they are moderate and commensurate with the anticipated benefit from that business activity. A Company-wide risk management and early warning system is in place within the Audi Group to actively monitor and steer risks. This covers AUDI AG and all subsidiaries from which significant risks that...

  • Page 167
    ...relate to the planning horizon of 2008 through 2010: Economic and industry risks As a globally active company, the Audi Group is highly dependent on international economic conditions. This is particularly true with respect to the important sales markets of Europe, the U.S., China and Japan. Although...

  • Page 168
    ... service providers. As a manufacturer of premium-segment vehicles, the Audi Group has installed extensive, efficient quality management procedures. Nevertheless, it is impossible to entirely rule out potential product liability risks. These could result in significant financial losses to the Company...

  • Page 169
    ... in the German market of just under 2 percent to around 3.2 million passenger cars. The Audi Group expects registrations of new cars in Western Europe (excluding Germany) to decline to 11.4 million vehicles. Dwindling sales figures in Italy will be the main factor at work here. In the countries of...

  • Page 170
    ... for 2007 and post positive overall results for its business activities in fiscal 2008. Anticipated development of vehicle sales The Audi Group will sustain growth in vehicle sales in 2008 and plans to improve significantly on the previous year's record figure by selling more than 1 million Audi...

  • Page 171
    ... the productivity and quality of process chains, and for strengthening customer loyalty. All investment measures share the common objective of sustainably strengthening the Audi Group's market position through a forward-looking model and brand strategy. The investment volume for property, plant and...

  • Page 172
    ... future developments The Audi Group has set itself the target of sustained growth - in terms of both quality and quantity - for 2008 and subsequent fiscal years. This will be reflected in the business figures for 2008 and 2009. Disclaimer The Management Report contains forward-looking statements...

  • Page 173
    ... AUDI AG, Ingolstadt, comprising the balance sheet, the 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 January 1 to December 31, 2007. The...

  • Page 174
    ... 315a of the German Commercial 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...

  • Page 175
    ... of the Audi Group for the 2007 fiscal year EUR million Revenue Cost of sales Gross profit Distribution costs Administrative expenses Other operating income Other operating expenses Profit from operating activities Result from investments accounted for using the equity method Finance cost Interest...

  • Page 176
    ... of the Audi Group for the fiscal year ended December 31, 2007 ASSETS EUR million NON-CURRENT ASSETS Fixed assets Intangible assets Property, plant and equipment Investment property Investments accounted for using the equity method Other long-term investments Deferred tax assets Other receivables...

  • Page 177
    ... companies and participating interests Change in securities Sale of shares Loans advanced Proceeds arising from asset disposals Cash flow from investing activities Capital contributions Transfer of profit Change in financial liabilities and in credit extended Lease payments Cash flow from financing...

  • Page 178
    175 Statement of Changes in Equity of the Audi Group for the 2007 fiscal year EUR million Financial assets available for sale Fair value changes recognized directly in equity without affecting income Included in the Income Statement Cash flow hedges Fair value changes recognized directly in equity...

  • Page 179
    176 Notes to the Consolidated Financial Statements of the Audi Group for the 2007 fiscal year Development of fixed assets in the 2007 fiscal year EUR million Gross carrying amounts Costs Jan. 1, 2007 Intangible assets Concessions, industrial property rights and similar rights and values, as ...

  • Page 180
    177 Value adjustments in gross carrying amounts Carrying amounts Costs Dec. 31, 2007 3,896 Cumulative depreciation and amortization Jan. 1, 2007 1,999 Changes in consolidated group Currency changes Additions, scheduled Additions, unscheduled Transfers Disposals Writeups Cumulative ...

  • Page 181
    ... Development expenditure recognized as an intangible asset, products currently in use Payments on account for intangible assets 4,139 Changes in consolidated group Currency changes Additions Additions from accounting using the equity method Transfers Disposals Disposals from accounting using...

  • Page 182
    179 Value adjustments in gross carrying amounts Carrying amounts Costs Dec. 31, 2006 4,334 Cumulative depreciation and amortization Jan. 1, 2006 1,454 Changes in consolidated group Currency changes Additions, scheduled Additions, unscheduled Transfers Disposals Writeups Cumulative ...

  • Page 183
    ... to the internationally practiced cost of sales method. AUDI AG prepares its Consolidated Financial Statements in euros (EUR). The Consolidated Financial Statements provide a true and fair view of the financial performance and financial position of the Audi Group. The requirements pursuant to...

  • Page 184
    ... of qualifying assets None None No significant * as of December 31, 2007 The Group In addition to AUDI AG, the Consolidated Financial Statements include all principal companies in which AUDI AG can directly or indirectly determine the financial and business policy in order to benefit from the...

  • Page 185
    ... Germany Other countries Investments accounted for using the equity method Other countries Subsidiaries reported at cost of purchase and other associated companies Germany Other countries Total 2007 2006 5 15 1 3 12 2 16 12 49 10 7 34 The principal companies within the Audi Group are listed...

  • Page 186
    ... time within the Audi Group. Revenue in the prior-year period of 2006 would have been EUR 21 million higher if Audi Zentrum Hannover GmbH had been included. Consolidation principles The assets and liabilities of the domestic and foreign companies included in the Consolidated Financial Statements are...

  • Page 187
    ... of income and expenses Revenue, interest income and other operating income are always recorded as the services are rendered or the goods or products are delivered, in other words upon passage of risk to the customer. Proceeds from the sale of vehicles for which buy-back agreements exist are...

  • Page 188
    ... and subsidies paid. Research costs are treated as current expenses in accordance with IAS 38. The development expenditure for products going into production is recognized as an intangible asset, provided that production of these products is likely to bring economic benefit to the Audi Group. If the...

  • Page 189
    ... work recognized as an intangible asset and for property, plant and equipment is based on current market factors, currency-specific aspects and the prevailing cost situation, with anticipated future cash flows being discounted at a risk-appropriate rate of 9 percent before tax. Investments...

  • Page 190
    ... or settlement value. Fair value generally corresponds to the market value or trading price. If no active market exists, fair value is determined using investment mathematics methods, for example by discounting future cash flows at the market rate or applying established option pricing models.

  • Page 191
    ... impairment of a financial asset or group of financial assets. Originated financial instruments Investments in subsidiaries excluded from consolidation and in participating interests are generally shown at their respective cost of purchase, because no active market exists for these companies and no...

  • Page 192
    ... tax assets which are unlikely to be realized. Inventories Raw materials and supplies are measured at the lower of average cost of acquisition or net realizable value (net selling price). Other costs of purchase and purchase cost reductions are taken into account as appropriate. Work in progress and...

  • Page 193
    ... Credit Method for defined retirement benefit plans as specified in IAS 19 (Employee Benefits). This method takes into account pensions and entitlements to future pensions known at the balance sheet date as well as anticipated future pay and pension increases. Actuarial gains and losses are reported...

  • Page 194
    ... for internal Group steering and reporting. Other sales constitute goods and services supplied to affiliated companies and sales to third parties. 2 Cost of sales Amounting to EUR 28,478 (27,309) million, cost of sales comprises the costs incurred in generating revenue and purchase prices in trading...

  • Page 195
    ... derivative hedging transactions Expense from the processing of payments in foreign currency Expense from the allocation of costs and rebilling Impairment losses on receivables Losses arising from asset disposals Miscellaneous operating expenses Total other operating expenses 2007 230 91 58 14 11...

  • Page 196
    ... the domestic interest rate, and to changed maturities. 9 Other financial results EUR million Investment result Income from investments in affiliated companies Income from profit transfer agreements Expense from the transfer of losses Expense from investments in affiliated companies Income from the...

  • Page 197
    ... in the 2007 fiscal year. Deferred tax assets totaling EUR 164 million were not carried for reasons of impairment. Unused tax loss carryforwards accounted for EUR 2 million of this amount, tax rebates for EUR 162 million. Deferred tax totaling EUR 161 (282) million was recognized directly in equity...

  • Page 198
    ...: EUR million Dec. 31, 2007 Dec. 31, 2006 Dec. 31, 2007 Dec. 31, 2006 Deferred tax assets Intangible assets Property, plant and equipment Long-term investments Inventories Receivables and other assets Other current assets Provisions for pensions Other provisions Liabilities Loss carryforwards...

  • Page 199
    ... The net results for financial instruments - as categorized under IAS 39 - are as follows: EUR million Financial instruments at fair value through profit or loss Loans and receivables Available-for-sale financial assets Financial liabilities measured at amortized cost 2007 42 - 140 361 - 2006...

  • Page 200
    ... from the cash pool and investments in securities. Interest income and expense for financial instruments not measured at fair value EUR million Interest income Interest expense Interest income and expense 2007 28 - 153 - 125 2006 26 - 128 - 102 Impairment losses for financial assets by category...

  • Page 201
    ...IAS 38. 15 Property, plant and equipment EUR million Land, land rights and buildings, including buildings on land owned by others Plant and machinery Furniture, fixtures and office equipment of which finance leases Payments on account and assets under construction Total Dec. 31, 2007 Dec. 31, 2006...

  • Page 202
    ... Non-current other receivables and other financial assets EUR million Loans advanced to affiliated companies Loans advanced to associated companies Other loans advanced Other receivables from affiliated companies of which from derivative currency hedging instruments (cash flow hedges) of which from...

  • Page 203
    ...of partial early retirement plans. 20 Inventories EUR million Raw materials and supplies Work in progress Finished goods and merchandise Total Dec. 31, 2007 372 287 2,002 2,661 Dec. 31, 2006 373 316 1,420 2,109 Inventories amounting to EUR 28,450 (27,442) million were recorded as cost of sales at...

  • Page 204
    ... Group companies, are reported under this item. 23 Securities Securities held as current assets comprise fixed-interest or variable-interest securities and equities, with yields of up to 5.20 percent being achieved. 24 Cash and cash equivalents Cash and cash equivalents essentially comprise credit...

  • Page 205
    ...not affecting income Result from securities Result from settled cash flow hedges Deferred tax items netted directly against equity Minority interests Capital contributions Other changes Difference from change in consolidated companies Position as of Dec. 31, 2007 110 110 - 110 110 252 231 - 483...

  • Page 206
    ... Reserve for cash flow hedges - ...84 - - 471 - - 19 - 171 - - 197 - 197 - - 819 - - 298 - 126 - - - - 592 Provisions for pensions and similar obligations - 352 - - 284 - - - 109 - - - 177 - 177 - - 51 - - - 40 - - - - - 166 Equity method accounting after tax 14 - 14 - 14 28 AUDI AG...

  • Page 207
    ... of profit to Volkswagen AG is allocated to the other retained earnings. Stock option plan Under Volkswagen AG's stock option plans, the members of the Board of Management and selected senior managers of the Audi Group were granted the right to acquire stock options for shares of Volkswagen AG by...

  • Page 208
    ... Liabilities to affiliated companies from cash pooling Liabilities to banks Liabilities from financial lease agreements Total Dec. 31, 2007 479 34 12 2 527 Dec. 31, 2006 140 24 45 1 210 Measurement of the non-current and current financial lease agreements is based on market interest rates in each...

  • Page 209
    ... five years amount to EUR 117 (148) 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 210
    ... the Audi Group was evolved into a pension fund model in Germany on January 1, 2001. The retirement benefit commitments for this model are also classified as defined benefits in accordance with the requirements of IAS 19. The remuneration-based annual cost of providing employee benefits is invested...

  • Page 211
    ... present value of the defined benefits changed as follows: EUR million Present value on January 1 Changes in the consolidated companies and initial application of IAS 19 Service cost Interest cost Actuarial gains (-) / losses (+) Pension payments from company assets Effects from transfers Currency...

  • Page 212
    ...: EUR million Current service cost for services provided by the employees in the fiscal year Past service cost Interest cost Expected return on plan assets Total 2007 2006 - 79 - - 104 17 - 166 - 71 - 28 - 104 13 - 190 The interest element in pension costs is shown under finance cost. The...

  • Page 213
    ... to balance sheet date but occasioned by revenue prior to the balance sheet date. The workforce-related provisions are created, among other reasons, for service anniversary awards, partial early retirement arrangements, suggestion awards and severance payments. The other provisions relate to a wide...

  • Page 214
    ... particulars 33 Capital management The primary goal of capital management within the Audi Group is to assure financial flexibility in order to achieve the business and growth targets, and to enable continuous, steady growth in the value of the Company. The capital structure is steered specifically...

  • Page 215
    ...following overview: EUR million Financial assets measured at fair value through profit or loss Loans and receivables Available-for-sale financial assets Financial liabilities measured at fair value through profit or loss Financial liabilities measured at amortized cost Dec. 31, 2007 53 2,642 8,122...

  • Page 216
    ... million Balance Sheet item Dec. 31, 2007 Carrying amounts of financial instruments Carrying amounts, miscellaneous Not under scope of IFRS 7 121 6 - 251 - - - 256 - - 1,290 Measured at fair value Non-current assets Other investments Other receivables and financial assets Current assets Trade...

  • Page 217
    ...- - 927 Measured at fair value Non-current assets Other investments Other receivables and financial assets Current assets Trade receivables Other receivables and financial assets Securities Cash and cash equivalents Non-current liabilities Financial liabilities Other liabilities Current liabilities...

  • Page 218
    ...1 is the highest rating category within the Volkswagen Group; it includes "customers of high creditworthiness" exclusively. Analysis of gross carrying amounts of overdue, unimpaired financial assets by maturity date: EUR million Overdue, not impaired Overdue Dec. 31, 2007 Trade receivables Other...

  • Page 219
    ... due to the customer's purchase invoice and payment processes. It was therefore not necessary to implement any contractual changes to prevent financial instruments from becoming overdue. The Audi Group did not accept any collateral with the intention of selling it in fiscal 2007. Liquidity risk...

  • Page 220
    ... Group Treasury and implemented at the operational level by the special mutual funds' risk management. With regard to representation of market risks, IFRS 7 additionally requires disclosures on how hypothetical changes in risk variables would affect the prices of financial instruments. Market prices...

  • Page 221
    ... exceed the balance of positive market values in the event of default by a contractual party of Volkswagen AG or Audi Group companies. The actual credit risk is negligible, as contracts are concluded only with business partners of impeccable creditworthiness and trading limits are defined for each...

  • Page 222
    ... buying and selling prices on which the transactions are based. EUR million Nominal volumes Time to maturity up to 1 year 4,463 - 1 177 4,641 Time to maturity up to 1 year 4,569 3,158 1 191 7,919 Market values Dec. 31, 2007 Cash flow hedges Foreign exchange contracts Currency option transactions...

  • Page 223
    ... within each Group company, or adequate insurance benefits are anticipated, for potential financial charges resulting from other legal or arbitrational proceedings. 39 Assets and liabilities held for sale There were no assets or liabilities held for sale on either December 31, 2007, or December...

  • Page 224
    ...employee benefits and support payments of which relating to retirement benefit plans of which defined contribution pension plans Total 2007 2,836 570 84 237 3,406 2006 2,804 636 104 220 3,440 45 Total average number of employees for the year 2007 Domestic Group companies Foreign Group companies...

  • Page 225
    ...The volume of transactions with the parent company, Volkswagen AG, and with other subsidiaries which do not belong to the Audi Group is presented in the following overview: EUR million Sales and services supplied to Volkswagen AG Volkswagen AG subsidiaries not belonging to the Audi Group Purchases...

  • Page 226
    ... and supplies of genuine parts. Business transacted for related parties mainly comprises 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 the supervisory or management boards of other companies...

  • Page 227
    ... only the "Cars" segment. The secondary segment reporting structure is based on the Group's internal steering and reporting arrangements. The Audi Group is structured into the segments of Germany, Rest of Europe and Rest of World on the basis of the regional locations of its assets. Inter-segment...

  • Page 228
    ... EUR million 2007 2006 2007 2006 Investments in intangible assets and property, plant and equipment Germany Rest of Europe Rest of World Consolidation measures Audi Group 1,831 235 13 - 2,079 1,511 399 7 - 1,917 Long-term investments 34 - 2 - 36 3 5 - - 8 EUR million 2007 2006 2007 Other...

  • Page 229
    ... Annual General Meeting of Volkswagen AG on April 16, 2002, which authorized the introduction of the stock option plan. The structure of the stock option plan is designed to grant the members of the Board of Management a remuneration component that is based on appreciation of the Company's trading...

  • Page 230
    ... 1, No. 10, of the German Commercial Code and Section 125, Para. 1, Sentence 3, of the German Stock Corporation Act - are indicated in the Notes to the Financial Statements of AUDI AG. The basic features of the remuneration paid to members of the Supervisory Board are stipulated in Section 16 of...

  • Page 231
    ... Chairman 5) 6) 3) Stockholder representative 6) 6) 1) The profession and company of the members of the Supervisory Board, together with other non-executive directorships, are presented in the Notes to the Financial Statements of AUDI AG. 2) Member of the Presiding Committee and the Negotiating...

  • Page 232
    ... transferred management responsibility for AUDI BRUSSELS S.A./N.V. to AUDI AG effective January 1, 2008. The control requirements of IAS 27.13, Sentence 2, are accordingly satisfied as of the start of the 2008 fiscal year, and this company will therefore be included in Audi's Consolidated Financial...

  • Page 233
    ... Statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group, and the Group Management Report includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal...

  • Page 234
    ... Name and registered office Capital share in % Fully consolidated companies AUDI AG, Ingolstadt Audi Australia Pty Ltd., Botany (Australia) Audi Brasil Distribuidora de Veículos, São Paulo (Brazil) Audi Canada Inc., Ajax (Canada)* AUDI DO BRASIL E CIA., Curitiba (Brazil) AUDI HUNGARIA MOTOR Kft...

  • Page 235
    ...the German market) Model Power output (kW) Transmission Fuel Fuel consumption (I/100 km) urban extra urban combined CO2 emissions (g/km) combined Audi A3 A3 1.4 TFSI A3 1.6 A3 1.6 A3 1.8 TFSI A3 1.8 TFSI A3 2.0 TFSI A3 2.0 TFSI A3 2.0 TFSI quattro A3 3.2 quattro A3 3.2 quattro A3 1.9 TDI e A3...

  • Page 236
    233 Model Power output (kW) Transmission Fuel Fuel consumption (I/100 km) urban extra urban combined CO2 emissions (g/km) combined A4 2.0 TDI quattro A4 2.0 TDI A4 2.0 TDI quattro A4 2.7 TDI A4 2.7 TDI A4 3.0 TDI quattro A4 3.0 TDI quattro S4 4.2 quattro S4 4.2 quattro Audi A4 Avant (B7) A4 ...

  • Page 237
    234 Model Power output (kW) Transmission Fuel Fuel consumption (I/100 km) urban extra urban combined CO2 emissions (g/km) combined Audi A6 Sedan A6 2.0 TFSI A6 2.0 TFSI A6 2.4 A6 2.4 A6 2.4 quattro A6 2.8 FSI A6 2.8 FSI A6 2.8 FSI quattro A6 3.2 FSI A6 3.2 FSI quattro A6 3.2 FSI quattro ...

  • Page 238
    ... 2004 2005 2006 2007 German Commercial Code (HGB) Production 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...

  • Page 239
    ... 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] Communications I/GP Phone +49 (0)8 41 89...