Audi to sell A1 compact car outside Europe, boost production

Volkswagen AG’s Audi luxury brand will start selling the new A1 compact outside Europe next year and increase production to meet higher demand, Audi sales chief Peter Schwarzenbauer said in an interview.

Audi decided to expand A1 sales after a website the automaker set up for the car attracted more than 150,000 interested customers worldwide, Schwarzenbauer said. The model, which will compete with Bayerische Motoren Werke AG’s 1 Series and Daimler AG’s Mercedes-Benz A-Class, will start at 15,800 euros ($20,100) and enters showrooms Aug. 27 in Europe.

“We will expand our production capacities by 20 percent” for the A1, Schwarzenbauer said yesterday in Munich. Audi initially pledged to produce about 100,000 A1s annually at its Brussels factory.

The A1, originally built to sell only in Europe, will be expanded to markets globally in 2011, with the exception of China and the U.S., he said. Audi, which is targeting record sales of more than 1.08 million cars and sport-utility vehicles this year, has a goal of dethroning BMW as the world’s largest maker of luxury cars by 2015.

“It makes good sense for Audi to focus on European core markets first before expanding the A1’s reach abroad, depending on demand for the vehicle,” said Tim Schuldt, a Frankfurt-based analyst at Equinet AG who recommends buying VW stock.

Volkswagen’s preferred shares were down 1.11 euros, 1.4 percent, to 77.97 euros as of 1:39 p.m. in Frankfurt trading. The stock has gained 19 percent this year, valuing Europe’s largest carmaker at 34.1 billion euros.

Young Professionals

Audi is targeting young professionals with what will be its cheapest and smallest car and expects 80 percent of purchasers to be first-time customers for the Ingolstadt, Germany-based carmaker, Schwarzenbauer said. Audi, which accounts for 19 percent of VW group sales and almost half of operating profit, is targeting these buyers with the intention of enticing them to trade up to a more expensive model in the future, he said.

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