Geneva Motor Show 2011: Audi to Unveil A3 Sedan Concept, Plant in Running for New Small Porsche SUV

The Volkswagen (VW) Group's recently appointed head of production, Michael Macht, has said that Audi's site in Ingolstadt (Germany) is in the running to produce a new small Porsche sport utility vehicle (SUV), the Cajun. The senior executive, who was formerly chief executive officer (CEO) of Porsche, told Automobilwoche that the plant is up against the Porsche factory in Leipzig (Germany). However, the Leipzig site is expected to have the upper hand, according to Macht, although an official decision will not be taken by the Porsche supervisory board until mid-March. He said that the reason for this is that the VW Group's available production capacity is exhausted and so will need to invest in the required body construction, assembly, and paint shop facilities. Macht added, "For this reason, Leipzig has a very good chance to become a fully integrated auto factory, in my view."

However, Macht's comments have angered Porsche's senior union leader, Uwe Hück, who has clamed that the executive is interfering in the internal affairs of the brand. He told the German trade publication, "The name of the Porsche CEO is Matthias Müller, not Michael Macht", and went on to say that Macht's statement is "going to cause us significant difficulties in ongoing negotiations".

Audi to Display A3 Sedan Concept

Meanwhile, Audi is planning to display a concept A3 sedan at the 2011 Geneva Motor Show taking place next month in Switzerland. The company earlier this week issued sketches and limited details of the new vehicle, which is being used as a technical study, as well as offering an insight into a broadening of this model's line-up. According to a statement, the concept is 4.44 metres long, 1.84 metres wide, and 1.39 metres tall, which the company says offers "dynamism" to the car's appearance. The height is contained by the vehicle having what Audi claims is a "flowing roof dome and a coupe-like, low C pillar". Other design features include a single-frame grille with tapered upper corners and headlights using the latest generation of LED technology, following the automaker's recently launched A6 and A8 models. The concept is said to be powered by the same 5-cylinder turbocharged engine that was launched in the TT RS, but with a power upgrade to 408 hp, matched to the automaker's S-tronic seven-speed double clutch transmission (DCT) and permanent four-wheel drive.

Outlook and Implications

Although Macht's comments confirm that the Ingolstadt plant is still under consideration to build the new Cajun, it is looking increasingly unlikely that it will be able to fight off internal competition from Porsche's own Leipzig site. Indeed, reports late last year in the local Leipziger Volkszeitung newspaper claimed that Porsche had already drawn up plans to expand the Leipzig site specifically for the new SUV and had held discussions with the city's authorities. There also seems to be support from inside the brand to undertake investment at the site to introduce the Cajun. Although the Leipzig plant is anticipated to require between EUR500 million and EUR700 million (USD681.6 million and 954.2 million) of investment, according to internal sources, current Porsche CEO Matthias Müller has told Automobilwoche previously that the Ingolstadt facility would face "considerable one-off costs" to produce the vehicle. He also said, "If the investment amounts for Leipzig and Ingolstadt are almost the same, we will certainly opt for Leipzig and develop our own location." Either way, whichever site wins the contract will need to be prepared to supply up to 60,000 units per annum (upa) to the market, given Porsche's reported expectations (see Germany: 18 February 2011: Porsche Targeting 60,000 Annual Cajun Sales—Report), although the plant may well be set up to supply even more, given how popular this vehicle could be and the market it is aimed at. What is interesting is the response of union leader Hück to Macht's comments. The VW Group currently owns 49.9% of the Porsche brand and is poised to swallow the business. However, there still seems to be a fierce independence at Porsche and a desire to make its own decisions.

The A3 concept set to be displayed in Geneva will give a very good indication as to what the next-generation Audi A3 will look like when it is launched on the new MQB architecture in 2012. This model has been increasingly popular since the first generation was launched during 1996 and has opened up the opportunity for the brand to launch the smaller A1 model. The model has also already been expanded from its original three-door hatchback version to also include a five-door hatchback and a convertible. The addition of a sedan will open up further opportunities for the model in markets where hatchbacks are not well received. These include North America, where the automaker is planning to lift its annual sales to 200,000 units by 2015. This model is also likely to make its way to markets such as Russia, India, and its already extensive Chinese operations, where such vehicles are also popular and there is still a great deal of opportunity for growth, particularly as customers become increasingly affluent and brand aware.