Audi announced plans yesterday to introduce a new SUV to lines linup in 2016, the Q2. At the same time, according to the automaker, it plans major revisions to the Q5, shown here.
Audi, Volkswagen’s luxury subsidiary that has been reeling from the Dieselgate scandal, came out swinging for the fences yesterday as it announced plans to bring out a new SUV in 2016 and major revisions to a second SUV. Also, said Automotive News, the automaker committed to an all-electric in 2018. In total, spending on the automaker’s aggressive plans over the next year will amount to more than 3 billion euros or $3.29 billion. The spending news comes less than two months after Volkswagen announced major plans to without or cut down on spending by more than $1 billion for 2015 and set aside more than 6.7 billion euros or about $7.3 billion this quarter to pay emissions-rigging scandal costs.
In a statement, Rupert Stadler, the carmaker’s chief executive, said that it Audi was “continuing without high levels of investment in future technologies to enhance the strong position of our brand.” Indeed, Audi has been signaling over the last few months that it had planned to enhance its new product investment.
To that end, the automaker announced that it will add another luxury sports utility (SUV) to the lineup for 2016, the Q2. And, the carmaker said it would revise the Q5. All told, the automaker plans to have 60 cars in its lineup by 2020.
Though Audi’s spending seems at odds with its parent’s cost-cutting moves, it is another piece of the spending puzzle. Audi would have announced enhancements to its five-year product planning, yesterday’s statement outlines a one-year spending commitment with some vague future product hints. This spending level is fully in line with VW’s announced plans to trim its spending to 12 billion euros, a cut of 1 billion euros or about $1.3 billion. Matthias Mueller, chief executive officer, has said the automaker plans to weed models out of its 300-model product range as it struggles with the ongoing costs of the emissions cheating scandal.
The emission scandal, where the automaker admitted to installing a “software defeat switch” that enabled its 2009 to 2015 “clean” diesel models to pass tough U.S. emissions standards for oxides of nitrogen, continues to punish the automaker. The automaker has said that 11 million vehicles worldwide have had the “switch” software installed. The “switch” is a software routine that tests to see whether an emissions test is underway. If the software determines a test is underway, the routine resets engine parameters to that the diesel powerplant passes the test. On completion, the engine reverts to normal operating conditions.
So far, the emissions scandal has left VW facing hundreds of consumer lawsuits; ongoing criminal probes in the U.S., Germany, Francy, Italy and South Korea, as well as suits from 28 states in the U.S. In addition, VW’s diesel models are currently on sales hold. The scandal has already cost the automaker its number one global sales position, as well as at least $7 billion in related costs. It has been estimated that when the scandal plays out finally that the cost will be in the $25 billion range.