Audi A8 gets upgraded to rival Mercedes-Benz S-Class

Audi AG, the world’s second-biggest maker of luxury vehicles, will upgrade the top-of-the-line A8 later this year to compete with a new generation of the Mercedes-Benz S-Class.

The Audi luxury sedan will be equipped with new LED headlights as part of its push to set a new sales record this year, the Ingolstadt, Germany-based unit of Volkswagen AG said today in a statement. The carmaker also plans to outfit A3 models with high-speed wireless technology to boost appeal.

Audi reiterated today that revenue will increase “slightly” this year on demand for the Q3 and Q5 sport-utility vehicles and the revamped A3 line, which is being expanded to include a sedan version. The carmaker, which has a goal of surpassing BMW in sales by the end of the decade, plans to sell more than 1.5 million autos for the first time in 2013, two years earlier than its initial target.

“We’re investing heavily in new products, developing leading-edge technology and expanding our global production network,” Chief Financial Officer Axel Strotbek said in the statement. “Despite challenging economic conditions, we’re sticking to our goals,” including operating profit at the upper end of its range of 8 percent to 10 percent of sales.

Higher Spending

Audi’s investments will be higher in the second half of the year than in the first six months. The company plans boost expenditures even further over the next two years, Strotbek said at a press briefing in Munich.

The VW unit will invest 11 billion euros ($14.5 billion) by 2015 to increase production and widen its model lineup in pursuit of BMW, according to figures previously released by the company.

Daimler AG’s Mercedes is expanding as well, adding entry- level models like the CLA compact four-door coupe, which will challenge the A3 sedan. The brand’s sales surged 20 percent in July on new compact models and a refreshed version of the E- Class mid-sized sedan. Mercedes is targeting 1.4 million deliveries this year.

To hold off Mercedes and overtake BMW, Audi is seeking to boost sales in the lucrative executive-sedan segment, where it trails competitors. The carmaker delivered 38,600 A8s last year, compared with 80,300 S-Class vehicles and 59,200 BMW 7-Series cars. The updated A8 is due to hit showrooms as soon as November.

Audi may sell 2 million cars a year before its target date of 2020, sales chief Luca de Meo said today in Munich. Audi has reached previous sales targets ahead of schedule and could also achieve this one “sooner,” he said.