AUDI hits the Two Million milestone in the UK after 50 years.

Fifty years after its first domestic delivery Audi UK has registered an A3 Sportback plug-in hybrid as its two-millionth car sale

• First Audi model codenamed F103 reached the UK in 1965, when the brand sold just 32 cars
• Two millionth car sold by the UK importer is an A3 Sportback e-tron plug-in hybrid
• Sales success achieved through more than two decades of strong and virtually unbroken growth –  2014 was no exception with a record 158,987 sales

When just 32 cars bearing the four rings found homes in the UK in 1965, it would have seemed improbable that an incredible two million more would follow, but this major milestone has today been reached by Audi UK almost fifty years later.

The first four-ringed car sold to a UK customer was a ‘compact executive’ in a model range of just one, internally codenamed the F103 and publicly known simply as ‘The Audi’. It was to be the springboard for a range that in 2015 numbers some 51 model types ranging from subcompact city cars to ten-cylinder supercars, and which has recently welcomed the A3 Sportback e-tron, the brand’s first ever plug-in hybrid and the two millionth car to be handed over to a UK customer.  

As parent company Audi AG edges ever closer to selling two million cars globally in a single year – around 1,741,000 cars were delivered to customers worldwide in 2014 – its UK importer has just cumulatively broken through the two million barrier buoyed by more than two decades of recession-resistant sales strength, during which time its trajectory has been upward in all but three years. From a base of just 14,344 cars in 1991, the brand exceeded 100,000 annual sales for the first time in 2007, and in 2014 posted a total of 158,987 deliveries. 

Director of Audi UK André Konsbruck marked the momentous occasion by saying: “It’s hugely gratifying for the team in the UK to reach this significant milestone in the brand’s history in the UK, but it’s the contributory figures lying behind the headline number which really speak volumes about our recent past and our future aspirations. 

Domestically the brand has risen from humble beginnings in the Sixties to become the leader in the premium segment, and the last two decades have delivered virtually constant, and in all but three years record-breaking, growth. These are really robust foundations on which we plan to build consistently and substantially with the help of an ever expanding portfolio of models.”

Ingolstadt born and bred

‘The Audi’ which projected the green shoots of this abundant growth was built by Auto Union AG, the conglomerate whose emblem contained a ring representing each of its four constituent companies Audi, DKW, Horch and Wanderer. 

It was assembled at the company’s Ingolstadt plant in Bavaria, Germany, which remains the headquarters of the modern day Audi brand to this day, and it was the first car to leave the production line with a four-stroke engine rather than the more commonplace two-stroke design. In terms of horsepower, the 1700cc engine produced 72PS, a fraction of the 570PS available in the most powerful production Audi to head the current range – the limited edition R8 LMX. 

Priced at £160,000 OTR, its 5.2-litre V10 powerplant is capable of propelling the supercar to 62mph in just 3.4 seconds and on to a top speed of 198mph.

Available as a two-door ‘coupé’, four-door saloon or estate, ‘The Audi’ was essentially the precursor to the Audi 80 and 90, which went on to form the conceptual basis of the A4, the compact executive saloon which sparked a revolution for the Audi brand in 1995 and began to decisively cement its position as a fully fledged member of the premium sector establishment.

Two million cars further down the line, the model that has posted the milestone for Audi UK combines a conventional 1.4-litre TFSI petrol engine with an electric motor to deliver the potential for up to 176mpg with CO₂ emissions of just 37g/km.

The latest electric plug-in hybrid variant of the Audi A3, which was crowned World Car of the Year in 2014, can run exclusively on electric power for up to 31 miles at speeds of up to 80mph, or can be powered by petrol combustion alone. When the two power sources are combined, an overall operating range of up to 584 miles is possible. The battery powering the electric motor can be charged by plugging the A3 Sportback e-tron into a home wallbox for as little as two hours and fifteen minutes.

VW to build next gen Phaeton, even though it losses money & VW is slashings overall costs.

With Volkswagen having embarked on a big cost-cutting drive, industry experts are baffled why the "people's car" maker plans to spend millions of euros upgrading a money-losing luxury sedan.

The 76,000 euro ($86,000) Phaeton, a pet project of Chairman Ferdinand Piech, has never met VW's original sales target of 20,000 cars annually. Analysts say the upper-premium car, which cost more than 1 billion euros to develop and came out in 2002, should be axed.

But sources at VW told Reuters that the company is now planning a more advanced version of the Phaeton -- even though the first-generation car was ranked by Bernstein analyst Max Warburton as one of the three "most loss-making European cars of modern times."

The plans appear all the more perplexing to analysts as VW has pledged to make annual cost savings of 5 billion euros at its passenger-car brand by 2017, as the world's second-biggest carmaker by sales seeks to narrow the gap with global leader Toyota.

'Painful action'

Announcing the "efficiency program" last July, CEO Martin Winterkorn promised "painful action" to revive the core brand where profit margins have been languishing due to a proliferation of models and parts.

"It's no longer all about bigger, higher, further," the CEO told managers at a Dresden strategy conference in December. "Now it's about being leaner, faster, more efficient."

His comments echoed VW's plans to reduce the number of costly parts and drop some non-profitable variants from the German group's 310-model lineup as Europe's largest automaker shoulders costs of future growth and investments in lower-emissions technology.

Revamping the Phaeton will seems to contradict the CEO's cost-cutting drive, said Evercore ISI analyst Arndt Ellinghorst, adding that switching production of the model to VW's MLB modular platform could cost as much as 650 million euros.

"Economically speaking, it's the most irrational project," London-based Ellinghorst said. "Piech and Winterkorn simply cannot let go of their fondness for luxury products."

A new glass-walled factory, R&D outlays and low sales volume led VW to lose 28,000 euros on each Phaeton sold between 2002 and 2012, Warburton wrote in a September 2013 note.

Unfazed by the losses, VW aims to pit the next-generation model against the Mercedes' 80,920 euro S-class flagship, sources said, adding the car may hit dealerships in 2017-2018. A plug-in hybrid version is also planned.

VW confirmed it was planning a successor to the Phaeton but declined to comment on the details or costs. It also declined to comment on analysts' loss, cost and sales estimates for the existing version, but said the sedan helped to show off its technical prowess.

The company does not disclose sales data for individual brands, only production numbers, which show it produced 5,812 Phaetons in 2013 -- the most recent annual figures published.

High-end battle

Stefan Bratzel, head of the Center of Automotive Management think tank near Cologne, said another high-end luxury sedan may overstretch the VW brand, traditionally a mass-market division which in November released a more upmarket Passat.

A new Phaeton could also affect sales of VW's other premium offerings, especially the Audi's flagship A8 sedan, which may share MLB underpinnings with the VW-badged model, he said.

"It doesn't make much sense strategically," Bratzel said. "The business case is equally questionable."

A new Phaeton would struggle against its premium rivals, analysts say. Sales of the model will average no more than 11,900 cars a year in 2017-2020, up from 6,300 this year, according to estimates from research firm IHS Automotive.

That compares with annual averages of 85,000 units for the Mercedes S class, 64,000 for BMW's 7 series and 41,000 for Audi's A8 in the four-year period, according to IHS data.

Buyers will never warm up to the notion of an upper-premium sedan made by the "people's car" brand unless they get a huge discount, a former VW Group executive told Reuters.

"This is the inherent problem, which puts the car's price positioning and profitability at risk," he said.

The Phaeton is the brainchild of Piech, the mastermind of VW's global expansion and its former CEO, who is well known for outmaneuvering both rivals and allies.

Sacred project

A former Audi North American chief, Axel Mees, was forced to leave the company in 2004 after criticizing the Phaeton project and Piech in public, a source at Audi said.

Meanwhile, Michael Horn, VW's new U.S. boss is chasing a lofty sales target of 800,000 VW brand cars by 2018, more than double last year's tally.

Horn will be tasked with relaunching the next Phaeton in the U.S. after VW pulled the model from the world's biggest premium-car market in 2006 because of poor sales.

Horn struggled with the answer when asked by Reuters at the Detroit auto show what potential he sees for the model in the country.

"That's a dangerous question," he said. "It's an image bearer with no relevance for volume."

New Volkswagen GTE, capable of 166mpg and 39g/km, making this one clean car.

• New plug-in hybrid Golf GTE combines benefits of e-mobility with GTI dynamics
• GTE available to order now with first deliveries expected in March
• Golf becomes the only car to be available with five powertrain types (four in UK)
• Combines petrol and electric motor to produce 204 PS and range of up to 580 miles

The Volkswagen Golf GTE is available to order from today, costing £28,035* RRP.  And unlike Volkswagen’s other electric vehicles (the e-up! and e-Golf) which are sold through a network of 25 e-Retailers, the GTE will be available through all of the company’s franchised sales outlets.

The name of Golf GTE reflects its standing in the line-up alongside the petrol-powered GTI and diesel GTD, while its pricing also reinforces this position.  

The new car is driven by two engines: a 1.4-litre 150 PS TSI direct-injection petrol engine and a 102 PS electric motor.  

Together, they produce a maximum power of 204 PS and a theoretical range of 580 miles, while maximum torque is 350 Nm (258 lbs ft).  A six-speed DSG gearbox developed for hybrid vehicles is standard.

The electric motor is integrated into the gearbox housing, while further hybrid components include power electronics and a charger.  An electro-mechanical brake servo and an electric air conditioning compressor make for energy-efficient braking and air conditioning.  

There are five operating modes: ‘E-mode’, ‘GTE mode’, ‘Battery Hold’, ‘Battery charge’ and ‘Hybrid Auto’.  In pure electric mode (activated at the press of a button), the Golf GTE can travel up to 31 miles.  Electric power can also be saved – for example when driving to a zero-emissions zone – and in electric mode, the GTE is capable of speeds of up to 81 mph.

With the TSI engine engaged as well, the Golf GTE can sprint from zero to 62 mph in 7.6 seconds and on to 138 mph, yet returns a combined cycle figure of 166 mpg and CO₂ emissions of 39 g/km.  As such it is expected to be exempt from VED and the Congestion Charge.

The Golf GTE’s 8.8 kWh lithium-ion battery can be charged in 3.75 hours from a domestic mains outlet, or 2.25 hours from a domestic wallbox. 

The Golf GTE is available in five-door bodystyle only and in one highly-specified trim level.  Visually, it combines elements of the e-Golf and Golf GTI, with C-shaped LED daytime running lights (e-Golf) and aerodynamic horizontal ‘fins’ (GTI).  Where the GTI features red, the GTE has blue accents, including across the radiator grille and into the headlights (which as on the e-Golf are LED), while 18-inch ‘Serron’ alloy wheels are fitted as standard.

Inside too, the GTI’s red highlights are turned to blue – including the stitching on the steering wheel, gear lever gaiter and seats, and a blue stripe in the tartan pattern on the sports seats.  Touchscreen infotainment system with DAB radio and Bluetooth is standard, while optional navigation includes bespoke EV features such as the ability to identify potential destinations on electric range, and charging points. 

The GTE also has an e-manager which allows the driver to preset vehicle charging, as well as interior cooling or heating and these functions can be operated remotely using the Car-Net app on a smartphone; a three-year subscription is standard in the UK.  The speedometer and tachometer are familiar, and the latter is supplemented by a power meter in the central display, which shows the status of the battery, whether or not power is being used and the intensity of any regeneration.

(*RRP OTR after £5,000 Government plug-in car grant has been deducted)