Ingolstadt. If Audi wants to continue its current success, its employees in Germany will need to work longer and more efficiently.
Audi has broken its unit-sales records every year for the past decade.
"We are going to see intensified competition in Europe's premium segment," said Werner Widuckel, Audi's head of personnel, referring to tougher competition from Asian brands.
Toyota is strengthening its Lexus premium brand by offering diesel and hybrid powertrains. Nissan will launch its Infiniti luxury brand in Russia this year and could debut the brand in western Europe before the end of the decade. Hyundai reportedly is considering either starting a luxury brand of its own or launching a high-end model aimed at premium-car leaders Audi, BMW and Mercedes-Benz.
Jochem Heizmann, Audi's board member in charge of production, and Widuckel are working together to improve productivity and lower labor costs.
To increase Audi's competitiveness, Widuckel sees the need to expand the 35-hour work week of Audi's employees to as many as 40 hours in areas such as technical development.
He said that the increase in working hours would mean more time for innovation, which he said would be vital for Audi's survival.
In the future, performance-based pay also is expected to play a larger role at Audi.
In addition, Audi Chairman Martin Winterkorn says the company will increase its productivity by 10 percent annually.
A labor agreement reached last April has given Audi more flexibility to reconfigure working hours so that it can produce cars more cost effectively.
Heizmann said that many small changes in the production process have led to greater efficiency.
"For example, in body construction, we have shortened the cycle time, so we are producing more cars in the same amount of time," Heizmann said.
One result of the change is that there now is enough capacity at Audi's main factory in Ingolstadt so that all A3 units can be built there. Last year, Audi parent Volkswagen's Brussels plant made about 23,000 three-door A3s.
"Around the start of the year, we transferred the overflow production from Brussels to (Ingolstadt)," Heizmann said. Each day, up to 845 units of the A3 and A3 Sportback are built at the plant.
Even the new A5 coupe, scheduled for introduction in the first half of 2007, is to be assembled in Ingolstadt.
Audi has reported record results for 10 straight years. In 2005, the manufacturer increased its revenues by 8.5 percent to 26.6 billion euros, or about $35.55 billion at current exchange rates. That resulted in a profit margin of 4.9 percent before tax versus 4.7 percent a year earlier.
Audi sold 829,100 cars last year, up 6.4 percent from 2004. It's goal for 2006: an 11th consecutive record year of deliveries to customers.
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