On 100th birthday, Audi weathering downturn

Audi AG is marking its 100th birthday this week in a strong position, with well-heeled customers defying the downturn to snap up its luxury cars and fuel its ambitions of catching rivals Mercedes-Benz, BMW and Porsche.

Audi celebrates its century on Thursday, with a gala event in its Bavarian home town of Ingolstadt that will feature luminaries such as German Chancellor Angela Merkel, Dallas Mavericks NBA player Dirk Nowitzki and eight-time Le Mans champion Tom Kristensen.

"July 16 not only gives us a reason to celebrate," said Chief Executive Rupert Stadler. "It also provides motivation for all Audi employees to continue writing the company's success story on into the future."

Like its competitors, Audi -- wholly owned by Volkswagen AG -- has felt the shockwaves from the crisis, but has seen its sales -- while still below pre-recession levels -- improve recently amid better sales in China's more recession-resistant market, a German program that pays people who scrap old cars and buy news ones, and refinements to quality and new fuel-efficient technologies.

The company said its June sales edged higher from last year, lifted in part by strong demand in China and Germany for its sporty cars that sell for anywhere between euro21,000 ($30,000) and euro100,000, along with narrowing declines in the U.S.

Audi, whose brands include the TT, Q7 and A5, sold 91,200 cars last month, up 1.3 percent from a year earlier.

U.S. sales were down 8.3 percent, but Audi said it increased its market share in the premium segment there by 1.3 percentage points to 9.1 percent. That left Audi optimistic that it would meet its full-year targets.

"We will finish on target -- achieving our sales forecast of 900,000 cars in 2009," said Peter Schwarzenbauer, who oversees marketing and sales for the company.

Meanwhile, BMW AG and Daimler AG's Mercedes-Benz saw June sales fall by 13 and 7 percent respectively, although the declines were smaller than in previous months.

August Horch formed the company in Zwickau on July 16, 1909, calling it August Horch Automobilewerke GmbH. Later he changed the name to Audi, or the Latin translation of his surname -- "hark!" in English.

In 1932 Audi merged with Horch, DKW and Wanderer to form Auto Union. The next year its famous symbol of four interlocking rings was introduced.

After World War II, Auto Union resumed production in 1949, helped in part by aid from the U.S. Marshall Plan. Volkswagen acquired it in 1964; four years later. The company suffered a spate of negative publicity and a precipitous drop in sales in the U.S. in the 1980s after reports found its Audi 5000 suffered from unintended acceleration because of the proximity of the gas pedal to the brake. But sales recovered as consumers embraced its A4.

Since then, the company has been on a record sales tear, posting 13 straight years of sales increases. Worldwide sales totaled euro34.2 billion in 2008.

It now builds cars in Germany, Hungary, China and Belgium and employs 58,000 people worldwide.