INGOLSTADT, Germany— Audi AG NSU.
XE -0.83% , the luxury car maker owned by Volkswagen AG VOW3.XE +1.37% , said Tuesday it expects higher sales in 2014, with growth in all regions of the world, but warned that profit would be hit by investment in new models and tougher climate regulation.
Although Audi predicts that sales will rise to more than €50 billion ($69.4 billion) for the first time in the company’s history, it only expects to meet its profit target because of an expensive push to develop new models and expand production capacity outside Germany, the company’s home market.
“Despite this high upfront investment in our future, we want to remain within our strategic target range and achieve an operating margin of 8% to 10% in 2014,” said Axel Strotbek, Audi’s finance chief.
Audi reported a 7.7% fall in net profit for 2013 to €4.01 billion compared with the year earlier, representing an operating profit margin of 10.1%. Global sales of brands ranging from Audi cars and Ducati motorcycles to Lamborghini sports cars rose 2.3% to €49.9 billion. Audi sold 1.58 million vehicles last year, an increase of 8.3% from the year before.
The mixed outlook at Germany’s number two premium car maker behind BMW AG BMW.XE +0.99% comes as industry executives remain cautious about the strength of Europe’s recovery. The industry also faces uncertainty with Ukraine crisis and higher costs to meet new European restrictions on emissions of greenhouse gases believed to cause global warming.
With the exception of a new version of its sporty Audi TT, the Ingolstadt-based car maker has no major product launches this year. At the end of last year, Audi unveiled plans to invest €22 billion by 2018 largely to expand production outside Germany and to develop new models.
Germany’s premium car makers BMW, Audi, Mercedes-Benz DAI.XE +1.17% and Porsche have been expanding their brands in part to meet a growing market but also to lower CO2 emissions to meet restrictions set by the European Commission. By adding more efficient models to their fleets, the car makers can lower emissions without hurting their most powerful models.