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Audi Invests in New Production Site to Support Ingolstadt Plant

Published: 25 January 2012

Audi's recent global sales success means it needs new investment to support the growth of its main Ingolstadt production base.



IHS Global Insight Perspective

 

Significance

Audi has purchased land to begin working on a facility that will support the ever-growing production numbers at the company's main production site, Ingolstadt.

Implications

The firm has acquired a 40-acre site at the Münchsmünster industrial park which is in close proximity to the Ingolstadt production site. The new facility will open next year and will comprise a press shop with transfer presses and production lines for form-hardened body parts and facilities for machining chassis components and an aluminium die-casting foundry.

Outlook

The investment illustrates the current record growth at Audi and the physical limits on production at its traditional production site in Ingolstadt. The number of models being manufactured at the plant has doubled since 2005, therefore the company needs further manufacturing capacity from satellite plants.

Audi has acquired land and begun work on a new manufacturing support facility at the Münchsmünster industrial park near to its main Ingolstadt plant, in order to support the unprecedented growth in production in recent years at its traditional manufacturing base. According to a company press release, Audi has purchased a 40-hectare site at the industrial park and will begin by initially developing 27 hectares of the overall site. The site will be devoted to manufacturing parts modules and body panels, and will feature a press shop with transfer presses and production lines for form-hardened body parts and facilities for machining chassis components. An aluminium die-casting foundry will open there from 2013. Commenting on the investment and expansion Audi's board member for production Frank Dreves said, "The strategic investment in Münchsmünster is part of our growth strategy. It allows us to free up capacity at existing plants and to use sites in the surrounding area for future technologies." The site is located in the heart of a component supplier cluster and it appears that it will become a centre for aluminium component production, a material which will be used significantly more in the future.

Audi is expanding its expertise in this increasingly strategically important field by setting up an aluminium die-casting foundry. "Die-cast components are a central element of our lightweight construction strategy. Having our own die-cast foundry will enable us to advance the necessary technology and guarantee the long-term supply of die-cast aluminum parts," explains Dreves. Audi is also planning the production of sheet-metal and thermoformed parts. The carmaker will continue to expand its production know-how in these area as it looks to further develop construction techniques and component modules that use the new generation of lightweight materials that will increasingly be used in passenger car manufacturing over the coming decade as ever more emphasis is placed on enhanced fuel efficiency and lower emissions.

Outlook and Implications

Audi has enjoyed unprecedented sales growth in recent years as the global market share of the mainstream premium brands has increased. Sales have particularly accelerated the wake of the last financial crisis with sales in emerging markets, and China in particular, proving to be a happy hunting ground as consumers in these markets become increasingly brand and status conscious. Audi grew at the fastest rate of all the big-three German premium brands in 2011, posting a 19.3% year-on-year (y/y) increase in combined global sales volumes to 1.30 million units. Sales in the Asia-Pacific region, which generates the majority of its sales from China rose by 35.3% y/y to 373,700 units. Although Audi is increasingly concentrating production in high-demand overseas markets such as China, it is also maintaining investment in its European production facilities and these factories still make significant international exports. Expansion in terms of volume and model lines at the Ingolstadt plant has been rapid in recent years. The company manufactured the A3, A3 Sportback A4 and A4 Avant at the facility in 2005. However, since that date the A5 Coupé, A5 Sportback, Audi A4 Allroad Quattro and Audi Q5 have since been added to the facility's production lines. The company therefore has a much greater need for production and logistics space relating to its output at Ingolstadt, hence the investment in the new Münchsmünster plant. Production at Ingolstadt has risen to just under 600,000 units in 2011, according to IHS Automotive's unconfirmed forecast, in comparison to just over 500,000 units in 2005. This also illustrates the way that sales of the traditional bodystyle vehicles like the A4 has seen their volumes eroded by the variants that have been added to the range such as the A5 and Q5. Production declined from 307,000 units in 2005 to 182,000 in 2011, although some A4 production has also been moved overseas. The investment in the new Münchsmünster site will presumably give Audi the capability of using a higher proportion of aluminium components, along with other new weight-saving materials, in its next-generation mainstream models like the A4 and A5.

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