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Audi Increasing Profitability, Looking at Possible U.S. Plant

December 10, 2007

FRANKFURT — German car maker Audi is aiming for an 8 percent profit margin ahead of schedule and might transfer some activities to the United States, chief executive Rupert Stadler said in an interview.

Stadler told Auto Motor und Sport magazine that the dollar's weakness had forced his group to consider building a factory in the United States.

"It is not enough to turn out just a few parts like door finishings in the dollar zone; we must look at components with more added value such as the engine and transmission," Stadler explained.

At the same time, the company remained confident of reaching its profit targets faster than expected.

"We certainly have adversaries like the weak level of the dollar to deal with but barring unforseen events, our goal of reaching a profit margin of eight percent will be reached before 2010," Stadler said according to the magazine's Internet site. He said Audi might produce its Q7 sports utility vehicle (SUV) in the United States, which currently accounts for less than 10 percent of the car maker's total sales.

Audi expects to sell 950,000 vehicles in 2007, which would represent a record as it gains on high-end German rivals such as Mercedes and BMW.

Audi's parent group, Volkswagen, has also said it is looking closely at a second factory in North America to complement its present plant in Puebla, Mexico.

By 2015, Audi wants to sell 1.5 million vehicles a year and is banking on new models like an A3 convertible and Q5 SUV, and emerging markets in China, Russia and South Korea to reach that goal.

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