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Audi announced its entry at a press conference at the Formula 1 Belgian Grand Prix at Spa-Francorchamps. At the event, Markus Duesmann, Chairman of the Board of Management of AUDI AG, and Oliver Hoffmann, Member of the Board of Management for Technical Development, answered questions in the company of Formula 1 President and CEO Stefano Domenicali and Mohammed ben Sulayem, President of the International Automobile Federation (FIA).

“Motorsport is an integral part of Audi’s DNA,” says Markus Duesmann. “Formula 1 is both a global stage for our brand and a highly challenging development laboratory. The combination of high performance and competition is always a driver of innovation and technology transfer in our industry. With the new rules, now is the right time for us to get involved. After all, Formula 1 and Audi both pursue clear sustainability goals.”

The key to getting involved is the world’s most popular racing series is the clear plan to become more sustainable and cost-efficient. The new technical rules, which will apply from 2026, focus on greater electrification and advanced sustainable fuel. In addition to the existing cap on costs for teams, a cost cap for power unit manufacturers will be introduced in 2023. In addition, Formula 1 has set itself the ambitious goal of being a carbon-neutral racing series by 2030.

Actively Shaping Formula 1’s Transformation

Oliver Hoffmann, Member of the Board for Technical Development, says: “In view of the major technological leaps that the series is making towards sustainability in 2026, we can speak of a new Formula 1. Formula 1 is transforming, and Audi wants to actively support this journey. A close link between our Formula 1 project and AUDI AG’s Technical Development department will enable synergies.”

From 2026, the electric power output for the power units, consisting of an electric motor, battery, control electronics, and a combustion engine, will increase sharply compared to today’s Formula 1 drive systems. The electric motor will then be nearly as powerful as the combustion engine, which has an output of about 400 kW (544 hp). The highly efficient 1.6-liter turbo engines run on advanced sustainable fuel – also a prerequisite for Audi’s entry into the series.

High Popularity in Key Markets and with Young Target Groups

Globally recognized, highly emotional, and technologically advanced – that’s how Formula 1 has met Audi’s exact requirements. The series holds races in all relevant markets of the brand. As a spectacular platform for the most demanding electrified racing cars in the world, it is of particular interest to car manufacturers. Audi is taking on the challenge of proving its “Vorsprung durch Technik” in this competitive environment.

The great interest in Formula 1 is global and the racing series is one of the sporting events with the highest reach in the world. In 2021, more than 1.5 billion TV viewers watched the races. Formula 1 is popular in key markets such as China and the USA, and the trend continues to rise – even among young target groups. On social media, Formula 1 is now experiencing the highest growth rates among the world’s most popular sports.

Neuburg Site to Develop the Power Unit

The power unit will be built at Audi Sport’s state-of-the-art Competence Center Motorsport in Neuburg an der Donau, not far from AUDI AG’s company headquarters in Ingolstadt. “For the development and manufacture of the Formula 1 power train, we will build on the valuable expertise of our motorsport employees, continue to invest in our motorsports center, and also recruit highly specialized professionals,” says Audi Sport Managing Director Julius Seebach, who organized the entry into Formula 1 as part of Audi’s realignment of motorsport.

In Neuburg there are already test benches for F1 engine testing as well as for electric motor and battery testing. Additional necessary preparations are currently being made in terms of personnel, buildings, and technical infrastructure, with everything essential to be in place by the end of the year. A separate company was recently founded for the power unit project as a wholly owned subsidiary of Audi Sport. Adam Baker will take over the management of the company and thus the Formula 1 project as CEO. The trained engineer has held various senior positions for manufacturers and teams in motorsport. Before joining Audi in 2021, he worked for the FIA for three years.

Audi will announce a decision on which team they will be lining up with in 2026 by the end of this year.

Formula 1 Decision Governs Motorsport Focus

Audi Sport is pooling its strengths for the Formula 1 project and as a consequence is discontinuing its LMDh project. The motorsport division had recently suspended the development of the sports car for endurance racing. Alongside customer racing, Audi Sport will continue its innovation project with the RS-Q e-tron in the Dakar Rally. Next year, Audi’s aim is overall victory in the desert.

Whether the World Rally Championship, World Sportscar Championship, US motorsport, DTM, Le Mans, or Formula E – Audi Sport has set standards in many categories with numerous titles. “Formula 1 is the next major milestone in Audi’s motorsport history,” says Julius Seebach.

Rolf Michl to succeed Julius Seebach

Audi’s entry into Formula 1 marks the conclusion of its motorsport restructure, but also the close of a formative period at Audi Sport GmbH. Managing Director Julius Seebach will join AUDI AG on September 1, 2022, and will take on a new strategic business area in Technical Development, reporting directly to the Executive Board.

Hoffmann, who, in his role as an Executive Board member also serves as Chairman of the Advisory Board of Audi Sport GmbH, would like to thank Seebach for his performance: “Julius stands for strategic foresight, consistent action, and sustainable results in challenging times.” Under his leadership, Audi Sport GmbH has repeatedly achieved record sales and earnings figures. Sales doubled with the RS model offensive and the all-electric RS e-tron GT was successfully brought to market.

In 2020, Seebach also assumed responsibility for motorsport at Audi and resolutely made it ready for the future. Under his leadership, the most complex racing car in Audi history was developed in record time: the RS Q e-tron for the Dakar Rally. Following its successful debut with four stage wins at the Dakar Rally in January, the Audi RS Q e-tron achieved its first overall victory in Abu Dhabi in March – the first triumph of a car with an electric powertrain in a desert rally. Entering Formula 1 is the successful conclusion of his work.

Starting September 1, Seebach will be succeeded by Rolf Michl, who has been Chief Operating Officer Racing at Audi Sport since February. Together with Dr. Sebastian Grams, he will form the Management Board of Audi Sport GmbH. Michl has a degree in business administration and is a long-standing member of the Audi Sport family. After holding various positions in marketing at AUDI AG and Audi Sport, he took over as Head of Product Marketing RS Models in 2016. After moving to Abt Sportsline as Director Vehicle Customization, he returned to Audi Sport GmbH as Head of Sales/Marketing in 2019. Michl has played a key role in shaping the company’s portfolio and sales successes over time. Hoffmann notes that “Rolf is an authentic leader and brings with him the experience he will need from motorsport and series production.” In addition to his positions in marketing, Michl was responsible for devising and implementing the Audi Sport TT Cup in 2014.

Article source: www.audi-mediacenter.com

When sharp minds work together, a comfortable couch isn’t always necessary. Certainly not in Audi’s Production Lab. Anyone who enters the hall in Gaimersheim feels like they are in a combination of a shop floor and an IT lab. In one corner are the 5G antennas. Diagonally across from them, an industrial robot is sitting on its base. Behind that are the server cabinets. IT experts sit at desks looking at their computers. “We take an idea that worked once under lab conditions and get it off the ground so it can go into stable 24/7 operation,” Löser explains. “We don’t need a big sofa or a football table for that.”

For Löser, a real production environment is much more important. In the past, new technologies were inadequately assessed because Audi couldn’t try them out first. To change that, the company with the four rings created the Production Lab in 2012. Since then, Henning Löser's team has tested intelligent assistance systems that employees support with new variants in the mesh between the person and the machine. These systems conserve resources and continuously develop and improve procedural safety and workplace ergonomics. One example is modular assembly, Audi’s assembly and logistics concept that is the only one of its kind in the world.

Every day, experts research and test new high-tech solutions like Ingolstadt shop floor IT or 5G for mass production suitability in increasingly networked, digitalized production. “In the process, we are constantly in touch with our colleagues in production so we can be sure we can implement our ideas,” says Löser, who has overseen the P-Lab since 2016. “We show them exactly what we're working on. There’s no point in us developing something theoretical that nobody uses in practice. We test and learn.”

Stability Is Critical

Stable production is critical for Audi and the P-Lab. “Our goal is 99.9 percent reliability,” says Löser. “We must assess how good uptime is in daily use.” How good is the corresponding service concept? How should colleagues from maintenance be trained so that the new application operates without interruption? “We only transfer new technology into production when our colleagues say something truly helps them,” the P-Lab boss explains. Another important factor is whether a good area of application even exists within the production process.

Paradigm Shift in Automation

The technologies that have occupied the workers in the P-Lab over the past ten years have changed significantly. They operate on the principle of ‘higher, faster, further’. “Making production better is like a competitive sport,” says Löser. “That means we use more cameras, more sensors, and above all, more algorithms in production.” Nonetheless, the system must operate steadily. “Make things as simple as possible. Then they won’t break,” the P-Lab boss says.

Right now, a paradigm shift in automation is well underway. “If we use 100,000 cameras in production, we also have 100,000 industrial PCs that do the assessment,” he explains. “But then who takes care of maintenance and repairs on that equipment? Who updates the operating systems? At some point, the cost of maintenance exploded.” Driverless vehicles are another example. The more Audi uses, the more functionality and fleet managers it needs.

On top of that, there is also equipment maintenance and monitoring. “The overall efficiency has to be right,” says Löser. The solution: work based on software and cloud technology. Updates go via the server – with three mouse clicks. Löser says, “Right now, we're running our shop floor IT in the Ingolstadt Heifer via a central server solution.”

Experts Are Looking Toward the Future

The P-Lab plans and tests far in advance. According to Löser, traditional production planning did not allow that kind of leeway. 5G is one example. Since 2018, the P-Lab in Gaimersheim has operated a 5G base station. To use 5G as a radio network suitable for automated production, the standards that must be applied are not the same as those for downloading videos. For example, controlling the equipment requires URLLC (Ultra-Reliable Low-Latency Communications). The tests in Gaimersheim enabled them to work out requirements for the global 3GPP standard and contribute them to groups that maintain standards. “We did our part to make 5G function seamlessly as a radio standard in automation,” Löser explains. The lab’s work ranges from controls for a safety cell with robots that must turn everything off within ten milliseconds to logistics applications that link containers using massive device connectivity. “We’ll need that when it comes to the future of production and logistics,” says Löser.

Direct Exchange Makes Pragmatic Solutions Possible

Today, more than 30 staff members from the Production Lab work closely with the various sites. Because inter-departmental colleagues from all production areas work simultaneously in the P-Lab on a range of projects, the number of workers is multiplied five or six times by temporary lab users. “Something is always going on in the P-Lab. Direct interaction with the users is important,” says Löser. Audi Production thrives on an open innovation culture, enabling the team to innovate. It makes the P-Lab an attractive employer for ambitious IT experts and engineers.

Löser says that technologies can drift to a certain point in a lab. The most recent mistakes only arise through use and must be eliminated on the spot. “To stay flexible, we need a smart factory that responds quickly to fluctuations in demand,” says Löser. “We can't just try out new ideas in serial production while it's happening. That would be disastrous. We’re in the P-Lab to do the necessary tests and take the next steps in smaller pilot projects. After that, we test out the technology, for instance, in the real lab of the Ingolstadt Heifer and take it to mass production from there.“

“Our financial performance in the first six months of 2022 shows just how strong and profitable our brand group is. Despite the challenging economic and geopolitical environment, we were able to increase revenue and returns significantly,” says Markus Duesmann, Chairman of the Board of Management of AUDI AG. “At the same time, the current situation in the world makes it clear that economies and society need to move away from fossil fuels even quicker. Expanding renewable energies and switching to e-mobility are important steps in this direction. That’s why we’re on the right track with our strategic focus on e-mobility and carbon-neutral production.”

Significant Growth in Deliveries of Electric Vehicles and Luxury Brands

Against the backdrop of the challenging supply situation, the Premium brand group delivered 797,587 cars to customers in the first six months (2021: 986,567). Compared to record deliveries in the first half of 2021, deliveries of Audi brand automobiles fell by 20% to 785,099 (2021: 981,681). Demand remained strong despite the ongoing semiconductor crisis and COVID-19-related lockdowns in China.

However, Ducati delivered 33,265 (2021: 34,515) motorcycles. The decline of 3.6% compared to the strong previous year reflects semiconductor availability. With 5,090 (2021: 4,852) vehicles delivered, Lamborghini recorded an increase of 4.9%, while the British brand Bentley – the newest member of the brand group – sold 7,398 (2021: 7,199)* vehicles.

Audi Continues to Implement its Electrification Strategy

The Audi brand increased the number of all-electric vehicles delivered to 50,033 (2021: 32,775) – an increase of 52.7% over the previous year. The Audi e-tron remained particularly popular with customers but the Audi Q4 e-tron recorded the highest growth. Against this backdrop, the share of all-electric vehicles delivered by the brand group increased to 6.3%.

With the successful rollout of the Audi charging hub, Audi is showcasing a solution for fast and uncomplicated electric vehicle charging in urban areas.The feedback from customers on the launch of the pilot site in Nuremberg is extremely positive, with a hub in Salzburg and other locations to follow in the course of 2022,” says Hildegard Wortmann, Member of the Board of Management for Sales and Marketing. Three additional sites in German metropolises will help meet the increased charging demands in urban spaces starting in 2023. Moreover, Audi is planning to open even more sites in German cities by mid-2024. Another milestone in the electrification strategy was the cornerstone laid for the smart factory for electric models at the Changchun site at the end of June. Following completion at the end of 2024, models based on Premium Platform Electric (PPE) will be rolled off the line for the Chinese market via sustainable and digitally connected production. The 150-hectare plant will have an annual production capacity of more than 150,000 vehicles.

Revenues Increased

In the first six months of the year, the Audi Group generated revenues of €29,869 (2021: 29,212) million. Despite declining sales figures, the brand group was able to increase its revenue by two percent. This growth was mainly due to the first consolidation of the luxury brand Bentley since January 1,2022. The Group succeeded in further improving its already strong price position thanks to the high demand for its attractive range of models. Measured against the Audi Group’s total revenue, the share of EU-taxonomy-compliant revenue increased to 12.3% in the first half of 2022. This way, the company underlines the importance of the ESG sustainability criteria anchored in its “Vorsprung 2030” strategy for all company and product decisions.

Operating Margin Significantly Exceeds the Strategic Target

For the first half of 2022, the Audi Group recorded a new high of €4,933 (2021: 3,113) million in operating profit, an increase of 58.5%. Operating margins climbed to 16.5% (2021:10.7%). In addition to the good price position and strong operating performance of the Lamborghini, Bentley, and Ducati brands, the operating profit includes positive effects from commodity hedges totaling €0.4 billion. Following a significant tailwind during the first quarter (€1,2 billion), the impact has eroded substantially.

“The significant increase in the operating profit and the operating return on sales in the first half of 2022 way above the strategically defined target corridor of 9 to 11% shows that we have mastered the turbulence well and systematically seized the opportunities at the same time,” says Jürgen Rittersberger, Member of the Board of Management for Finance and Legal Affairs of AUDI AG.

Strong Operating Performance for Lamborghini, Bentley, and Ducati

The Lamborghini brand increased its sales in the first half of the year by 30.6% to €1,332 (2021: 1,020) million. The brand’s operating profit increased by 69.3% to €425 (2021: 251) million, with a margin of 31.9% (2021: 24.6%). Bentley achieved revenues of €1,707 (2021:1,324)* million while operating profit increased to €398 (2021: 178)* million to a new record high. The margin was 23.3% (2021: 13.4%)*. A strong price position offset Ducati's declining delivery figures. The motorcycle brand increased its revenue by 5.4% to €542 (2021: 514) million, generating an operating profit of €68 (2021: 59) million – corresponding to an operating margin of 12.6% (2021: 11.5%).

Financial Result and Net Cash Flow

The financial result in the year’s first half was €754 (2021: 762) million. This result includes the lion’s share of the business in China, which amounted to €431 (2021: 565) million, lower than the previous year. The decline is a consequence of the COVID-19 lockdowns in China in the second quarter. Earnings after taxes soared to €4,390 (2021: 3,386) million – an increase of 29.6%.

Compared to the very high figure in the previous year's first half, net cash flow normalized to €2,593 million in the first six months of 2022 (2021: 5,512 million). Among other things, this is due to increased inventories caused by disruptions to logistics and supply chains, especially by COVID-19 lockdowns in China and inadequate semiconductor availability. Additionally, investments, for example, in the new production site at Audi’s FAW NEV Company in Changchun and the transfer of stakes within the Volkswagen Group reduced Audi’s net cash flow.

Despite the Challenges: Forecast for Deliveries, Revenue, and Margin Confirmed

The Audi Group’s forecast includes the currently foreseeable short-term consequences of the war in Ukraine, the ongoing semiconductor crisis, and the COVID-19 lockdowns in China in the first half of the year. The other effects of the geopolitical situation and the gas shortage on the global economy cannot be predicted with sufficient certainty.

The brand group expects deliveries of between 1.8 and 1.9 million vehicles and revenues of between €62 and €65 billion for the full year 2022. The operating margin is forecast to be between 9 and 11%. Net cash flow is expected to reach between €4.5 and €5.5 billion. Audi anticipates a CapEx ratio of between 4 and 5 percent. Due to higher upfront expenditure on future technologies, the proportion of research and development costs is now expected to be slightly above the 6 to 7% corridor.