GENEVA -- Audi, the luxury unit of Volkswagen AG, said on Tuesday its sales slipped in the first two months of the year but forecast a return to form in the second half, with strong growth in China.
The Audi board member responsible for sales, Georg Flandorfer, told Reuters in an interview at the Geneva auto show that the company had sold 1.6 percent fewer cars in January and February than a year ago, but he still expected full-year sales to rise to around 750,000 units from 742,000 last year.
"The growth will come from China," Flandorfer said. "In Germany we expect to be just above last year's level. The market with the biggest doubt is the North American region, where we should be at around last year's level."
Weaker sales of the firm's small A2 hatchback and TT sportscar pushed group sales down to just under 108,000 units in the first two months of the year, but Flandorfer was confident sales would catch up with last year's level by early July.
He also noted that the company, which exports around 70 percent of its cars, had just launched an updated A4 compact saloon, or sedan, a year ago, and that potential customers could also have been holding back ahead of the launch of the new A3 compact hatchback, unveiled on Tuesday.
He said Audi aimed to sell 130,000 of the new three-door A3 cars this year, up more than 10 percent on annual sales of the old model, and predicted sales would be lifted further by the launch of a five-door variant in around a year's time.
A3, PIKES PEAK FOR AMERICA
Flandorfer said Audi would sell the five-door version of the A3, which would be a cross between a hatchback and an estate car, or a station wagon, in the United States and Canada -- the first time it has taken the model across the Atlantic.
The company will also target North America with a production version of the Pikes Peak concept vehicle it showed at the Detroit auto show at the start of the year, a model which will be a cross between an off-roader and a luxury car.
"You can be sure that in 2005 the car will be on the streets. More than half will be sold in the North American region," Flandorfer said, adding that the company expected to produce between 30,000 and 50,000 of the vehicles each year.
He said the car would be positioned and priced above rival BMW AG's X5 sports utility vehicle and Porsche AG's recently launched Cayenne.
Audi, which accounted for around a third of the Volkswagen group's profits last year with a pretax figure of 1.25 billion euros, has said it expects flat profits in 2003 despite the anticipated rise in sales.
It is not the only German carmaker banking on an upturn in the second half. Luxury rival BMW is hoping revised versions of its 3-series and a new 5-series saloon will help its business in the latter part of the year.
Even Audi parent Volkswagen could cannibalize some of the new A3's sales when it launches its fifth-generation Golf, an identically-sized hatchback, in the fourth quarter.
Flandorfer estimated a debate on a government proposal in Germany to raise taxes on company cars, which has dragged on for close to six months, had cost around 40,000 domestic unit sales as potential clients put off purchasing decisions, but he said much of that amount had been compensated for elsewhere in Europe.