Interview with 94/95 Prism / 1 / 2014

Arthur D. Little manages to achieve new sales records every year and is driving towards the 2 million mark for global sales. What do you think are the reasons for this success – particularly given the intense competition in the premium car segment?

Stadler We have grown so quickly because, thanks to our strong products and relevant innovation, we have consis- tently developed our brand image. Today, we deliver twice as many worldwide as we did ten years ago. And four times as many as we did twenty years ago. Between now and 2020, we will be moving forward and increasing our range to 60 models. An important building block in this are our SUV models. We have announced a new starter model for 2016 with the Q1. I can imagine that one or two more versions will be added to that.

Arthur D. Little To what extent is significant growth in the automotive sector actually possible over the next 10 years? How must the manufacturers react to this?

Stadler The world market will grow by a fifth by the year Our courageous 2020, from 70 million new registrations today to more than 83 million per year. At the same time, the premium sector decision to invest will grow proportionally faster than the mass market. We Picture by AUDI by Picture in China a quar- are preparing ourselves by making our production global. New plants in China and Mexico and the expansion of ex- ter of a century isting manufacturing facilities in Győr and are the ago is paying off. most significant examples. We see growth potential, for ex- ample, in the USA, where we will reach our planned target of 200,000 deliveries for 2020 faster than we planned and, “We live in a culture of permanent of course, continuing in China. There we are clearly leading the premium segment and have expanded our advantage transformation.” even more in recent years. In 2014, as the leading brand, we will sell more than half a million cars in China, setting How German premium car manufacturer AUDI is accelerating a new benchmark. Our courageous decision to invest in into the future. China a quarter of a century ago is paying off.

An interview with Rupert Stadler, CEO of AUDI. Interview with Rupert Stadler 96/97 Prism / 1 / 2014

We are seeing that generations Y and Z are incredibly interested in having more mobility to play with – even if stricter criteria in terms of the connectivity and About AUDI eco-efficiency of cars are emerging. With Audi, and , the “Vorsprung durch Technik,” which comprises Audi Group has long been one of the most successful the brand values of sportiness, progressiveness and car manufacturers in the premium and supercar seg- sophistication. ment. Since 2012, motorcycles of the traditional Italian Arthur D. Little What are the three biggest space in the city. Maybe they will be able brand Ducati have complemented the product range of Audi manufactures “Vorsprung durch Technik” at ten the Audi Group. sites with lengthy traditions of car manufacturing. Cut- challenges which AUDI will have to face as to live side by side in harmony in the future. ting-edge logistical processes, the synchronized Audi a brand over the coming years? Traffic lights could become unnecessary; In 2013 Audi increased its total number of units deliv- Production System and a highly qualified workforce of public areas would get a new lease of life. ered by 8.3 % to 1,575,480 (2012: 1,455,123) vehicles more than 70,000 guarantee uniform Audi standards Stadler The three most important tasks We are working on these kinds of visions, – a new all-time record for the company. The brand worldwide. Every Audi production site achieves very with the four rings is especially noted for its unmistak- high standards of quality, efficiency and environmental are alternative drive systems, connectivity for example with our AUDI Urban Future able design, innovative technologies and high quality acceptability. and the trend that more and more people Initiative. Ideas come out of this, which standards. This is expressed by the brand essence are living in megacities. Cars with electric require a lot of courage when it comes to engines bring the idea of CO2-free driving town planning as well as technical knowl- closer to us. We include the whole value edge from all disciplines. chain and also ask ourselves how the elec- tricity which we use to charge electric cars Arthur D. Little What do you think of is produced. And we develop alternatives. the fact that owning a car is no longer so

We are already involved with CO2-neutral important for younger generations? Is this technology by using gas from renewable shift in the market really taking place? sources in the g-tron. The second big topic is the networked automobile. Peo- Stadler Is that really the case? Personal ple in the 21st century are digitally connect- mobility ranks much higher among young ed to one another, at work and in their free people than many would like to believe. The time. They want to always be online. We are number of young people who are getting meeting this need with the innovative AUDI their driving license is increasing consider- connect system. Challenge number three ably. We are seeing that generations Y and is around mobility in the city of the future. Z are incredibly interested in having more More and more people want to live and mobility to play with – even if stricter crite- work in the city. For this reason, an intelli- ria in terms of the connectivity and eco-ef- gent structure and new forms of mobility ficiency of cars are emerging. Above all, are needed. From 2015 onwards, cars will sustainability matters a lot to younger gen- use standardized interfaces to exchange erations. However, this change of culture is relevant safety information with each other. different from region to region; just look at Today, cars, pedestrians, cyclists and buses Asia where prestige is still one of the most are often in competition over the limited important reasons for purchases. Picture by AUDI by Picture Interview with Rupert Stadler 98/99 Prism / 1 / 2014

Arthur D. Little Where are the main inno- benchmark for the market with our lighting bustion engines play a large role, particular- The most important thing vation areas for the future? What can we technology, such as the laser light which ly if they can be powered with fuels which expect from AUDI? AUDI is the first manufacturer in the world are produced in a way which is CO2-neutral. for us is our identity which, to introduce to a wide range of vehicles. Today, the AUDI e-gas which we produce as lateral thinkers, we look Stadler Today, a car has a product life cycle Today, highly efficient drive systems, safety, with excess wind energy is already available of around seven years. We are therefore driver assistance and piloted driving are to buy. We are also working with two com- for and give enough space. already thinking a decade in advance and huge trends. AUDI uses numerous trend panies who are developing AUDI e-diesel In short, people who think working intensively with trend scouts scouts and development centers in hot with the help of microorganisms and AUDI outside of the box. all over the world. The car as the largest spots across the world. In particular, we are e-ethanol with plant waste. Our future strat- mobile device must, on the one hand, be constantly discovering more creative poten- egy is comprehensive. planned for the long term and, on the other, tial in Silicon Valley and in Asia. In addition, must be in a position to integrate innovative we are working with globally renowned Arthur D. Little Growth and innovation developments in hard and software at short universities. require considerable financial resources Stadler The trick is to position AUDI as a notice. An important field for the future and effort. Over the next five years, AUDI strong and confident premium brand. At the are assistance systems which unburden Arthur D. Little Mr Stadler, you were quot- will invest 20 billion euro in the production same time, we want to benefit from the the driver. Think of the stop-and-go traffic ed in the press as saying: “The electric car and development of new models. How will synergies within the VW Group. I am con- on the motorway. An electronic helper can is coming. There is no question of it.” What AUDI master this transformation? vinced that we can concentrate much more take over the steering in traffic jams or slow strategy is AUDI following in comparison to strongly on our own program thanks to the queues. Piloted driving will be a break- its competitor BMW? Stadler We have recently increased the benefits which the group brings us. The through technology in a few years time. amount to 22 billion euro. For years, we intelligent building block and modular phi- Stadler Even a company which is driven by have been bringing in one record profit losophy allows us to be quicker and more Arthur D. Little How is the development technology must always focus on cus- after another, and achieving returns which efficient than anyone else in the market. at AUDI organized? What is the company tomers and their needs. We are therefore actually lie above our strategic target range doing in order to live up to its slogan “Vor- relying on the plug-in hybrids in particular of 8-10 %. Thanks to this, we can make Arthur D. Little In comparison to other sprung durch Technik”? in the first phase of electro-mobility. Our these enormous investments using our car manufacturers, AUDI is seen as having

A3 e-tron enables CO2-free mobility over own resources. They cover the expansion a particularly strong corporate and man- Stadler The third generation TT, which has short distances without having to worry of our production capacity as much as our agement culture. Which kind of leadership just been launched, proves that we are in about range. In terms of production, hybrid model and technology campaign. Parallel to culture is important to you? a fantastic position with our key strengths technology can be integrated into all of our this, our company has grown to more than of lightweight construction, four wheel factories. By doing this, we can always 73,500 employees. Currently, a four figure Stadler We at AUDI really do have a com- drive, design, quality and sportiness. The TT produce exactly as many plug-ins as are amount of employees are being added for pletely different corporate culture. From the brings a pioneering display and operating required according to demand. The purely our new locations in Mexico and Brazil. We outside, it is often seen as casual. The flat system with it and has become another electric drive system will come, but during live in a culture of permanent transforma- hierarchies also stand out immediately in 50 kilograms lighter. We have also set the the transition phase highly efficient com- tion. comparison to the rest of the industry. The most important thing for us is our identity Arthur D. Little With regard to this, is the which, as lateral thinkers, we look for and fact that the AUDI brand belongs to the give enough space. In short, people who We are constantly discovering more creative Group structure a blessing or a think outside of the box. People who do not potential in Silicon Valley and in Asia. curse? settle for the first solution. People who find Interview with Severin Schwan 100/101 Prism / 2 / 2013

I’m deeply convinced that Europe’s long-term prosperity is directly linked to innovation.

Picture by AUDI

the smartest way instead of the most com- company with four rings. We know very well AUDI is a diamond in the rough which we want plex one. Innovation does not happen at the that money alone could never provide this press of a button. This is why we have de- powerful, consistent boost to motivation. to polish to make it truly shine. veloped innovative ways of working which suit individual styles. The basis for this is a Arthur D. Little AUDI is one of the most who their most popular employer is. We Stadler There is only one kind of AUDI em- distinctive culture of trust. The result and attractive employers to graduates. What do achieved first place, not only in the Automo- ployee for me, regardless of where in the the success are all that count. you do as an organization to maintain this tive/large company category, but also in the world they work for the company with four image? overall ranking. We are proud of this. We rings. Our training measures are of course Arthur D. Little What is the significance of took first place from 2,000 companies in 22 designed according to regional conditions, financial incentives in this context? Stadler In order to gain new skilled work- sectors. but the high expectations of our employ- ers, we consciously rely on our employees ees are the same worldwide. For our new Stadler Our profit-sharing schemes reward recommending AUDI as an employer. We Arthur D. Little How have you organized plant in Mexico we give out scholarships to the best performance within our workforce. also seek contact with young skilled work- your global HR processes and talent man- young academics, therefore tying them to However, our employees do not just show ers in lectures and partnerships with uni- agement systems, i.e., which mixture of our company. The budding Mexican engi- this commitment because of the financial versities, through internships and positions centralization and regional autonomy are neers spend part of their time during their incentives, but also because they are proud for doctoral candidates. The German news you aiming for? studies in Germany and get to know AUDI to be a part of AUDI and to work for the magazine Focus recently asked 19,000 staff in depth while they are there. Interview with Rupert Stadler 102/103 Prism / 1 / 2014

Arthur D. Little The car industry acts as the patterns of success demonstrated by a pioneer for other sectors in areas such young industries which the established as globalization, innovation and efficiency. ones can learn from. What are the patterns for success in other sectors which the car industry can learn Arthur D. Little You were voted CEO of the and benefit from? Year, are an honorary professor for business studies at the University of St. Gallen, an Stadler Our industry can certainly learn author, and an avid supporter of FC Bayern from the speed of the IT sector. Within the . What are your plans for the future? space of a few months, the chip indus- try presents processors which are faster Stadler First and foremost, I am passionate and even more high-performance. Small about being a part of AUDI. I want this to companies can become large overnight. stay this way and I want to set a few more Anticipating what their customers want, things in motion using all of the power of being there for them 24 hours a day, myself and my team. AUDI is a diamond in constantly questioning themselves, and, if the rough which we want to polish to make necessary, reinventing everything all over it truly shine. again and backing one strategy: these are Picture by AUDI by Picture

Rupert Stadler Chairman of the Board of Management of AUDI AG

Rupert Stadler was born on 17 March 1963 in Titting From 1997 Stadler was Head of the Board of Man- (). agement's Office for the , and Stadler studied Business Management, majoring additionally Head of Group Product Planning from in Corporate Planning/Controllership and Finance, January 2002. Banking and Investment, at Augsburg University of He became AUDI AG Board Member with effect from Applied Sciences. 1 January 2003. From 1 April 2003 to 31 August 2007 After graduating in Business Management, Stadler Stadler was responsible for the Finance and Organiza- started his career at Philips Kommunikation Industrie tion Division. AG in Nuremberg. He became Chairman of the Board of Management of Thomas Becker In 1990 Stadler joined AUDI AG, Ingolstadt, where he AUDI AG on 1 January 2007. is an Associate Director at Arthur D. Little's assumed various controlling tasks in the Sales and He joined the Board of Management of Volkswagen Munich office and is member of the Global Marketing area. on 1 January 2010 in his capacity as Chairman of the Automotive Practice. Stadler switched to Volkswagen/Audi España SA, Board of Management of AUDI AG. , as Commercial Director in 1994. In that capacity, he was responsible for Controllership, Ac- counts, Personnel and Organization.