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December 30, 2009

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Audi plans to invest US$10b on expansion

AUDI AG plans to spend 7.3 billion euros (US$10.51 billion) on plant upgrades, new products and research as it moves to expand its business worldwide and increase market share.

Audi, a unit of Volkswagen AG based in Ingolstadt, Germany, is to spend the money from 2009 to 2012 and will increase the number of models from its current 34 to 42 by 2015.

Some 5.9 billion euros will go toward new products and future technologies.

"With our planned investments in new products and mobility concepts, for example electric propulsion, we are creating a basis for our company's future growth," said Axel Strotbek, who oversees finance and organization at the company.

Investors agreed, pushing Audi shares up nearly 4.2 percent to 500 euros in Frankfurt trading.

The company also wants to expand its model line, adding the A1, A7, A8 and R8 Spyder to its portfolio in 2010, along with the Q5 Hybrid, slated to reach the market in 2011.

"We will be in a position to finance all our planned investments from our operative cash flow," Strotbek said.

The car maker plans to spend heavily at its German plants, giving out 3.8 billion euros to its Ingolstadt and Neckarsulm plants from this year to the end of 2012.

Some 2.5 billion euros will be invested at Ingolstadt, including a new transmission and emission center, along with production of the A1. Another 1.3 billion euros will be spent at Neckarsulm on production of the A6, A7 and A8 models.


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