Audi Throws Down $29 Billion to Overtake BMW

Audi has announced they will invest $29 billion ($24 billion euros) through the end of 2019 in an attempt to overtake BMW as the leading luxury-car manufacturer in the world. The money will go towards expanding its production line and upgrading its technology in order to try and wrench the top spot from the reigning luxury car champions.

According to the Ingolstatd (the unit of Volkswagen AG based in Germany), about 70 percent of the total investment will be directed towards new Audi models like the Q1 subcompact sport-utility vehicle. Audi plans to sell more than 1.7 million vehicles this year - the most yet.

Audi also plans to churn out ten new model vehicles by 2020, increasing its model options from 50 to 60. "We’re making large investments in the innovative areas of electric mobility, connectivity, and lightweight construction," said Chief Executive Officer Rupert Stadler in the Ingolstatd statement. The budget increase will also be part of Volkswagon’s $100+ billion investment to oust Toyota as the overall leading car manufacturer on the globe.

Photo by Martin Leissl - Bloomberg

An employee secures a wheel to an Audi A6 Quattro automobile as it passes along the Audi AG production line inside the carmaker's factory in Neckarsulm.

As the second-largest luxury-car manufacturer in the world with only BMW ahead of them, Audi has been slowly closing the gap on their competitor. Audi fell short of BMW’s luxury-car sales this year by only 42,600 cars (from January to November), which is improved from 54,600 cars a year ago. If this trend continues, Audi will overtake BMW by 2019.

"Despite the growth in total investment," said Volkswagon’s Chief Financial Officer Axel Strotbeck, "we will keep a watchful eye on the upcoming challenges and exercise the required discipline costs."

Audi is already number one in luxury-car sales in China and Europe, and is setting its sights on the United States. Their new Prologue concept car was unveiled in Los Angeles which featured a more macho design concept. Audi also plans to go head-to-head with Tesla Motors Inc. by releasing an electric crossover in 2017 to appeal to energy-conscious Americans. Plans for a new Audi factory is also underway in Mexico to begin manufacturing the Audi Q5 SUV to supplement U.S. demand.

Photo by Martin Leissl - Bloomberg

An Audi R8 5.2 luxury automobile sits on display in the Audi AG Forum in Neckarsulm. Audi, the No. 2 in global luxury-car sales, aims to surpass BMW AG’s namesake brand in deliveries by the end of the decade.

But if you think BMW will just stand by and watch as Audi passes them, then think again. BMW will pull out all the stops to hold onto their crown as the leading luxury-car manufacturer, and are planning on expanding their own line as well. You can expect to see new models like the $44,700 (MSRP) BMW X4 - a coupe-styled SUV - and the luxurious $135,700 i8 plug-in hybrid sports car hitting the states in the near future. The race is on, and as Audi closes the gap, we’re likely to see some creative and compelling new models coming into the market in the following years. Whether Audi passes BMW or not, one thing is for sure: the winner is ultimately the consumers.