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Audi, Lamborghini Predict Recovery as Drivers Return to Luxury

Volkswagen AG’s Audi and Lamborghini divisions anticipate higher sales next year, an indication that luxury carmakers may start to overcome the worst slump since World War II.

“Global markets will bottom out this year,” Audi Chief Financial Officer Axel Strotbek said in an interview at the carmaker’s headquarters in Ingolstadt, Germany. “By and large, we expect a slight recovery in 2010.”

Audi reported higher sales last month for the first time this year and forecasts a “slight increase” in 2010, driven by new models such as the A5 Coupe, the A1 small car and the latest A8 sedan, he said. Bayerische Motoren Werke AG and Daimler AG’s Mercedes-Benz, the world’s top luxury-vehicle makers, had their slowest sales declines in at least eight months in June.

In Germany, customers took advantage of a 2,500-euro ($3,550) trade-in subsidy which spurred Audi sales to a record 27,700 vehicles last month. The U.S. market may “firm up” in 2010 after bottoming out this year, the CFO said. Other regions driving sales include Australia and India, the executive added.

Automobil Lamborghini SpA, the Italian maker of the $200,000 Gallardo sports car and a part of VW’s nine-brand structure, sees “some signs of a recovery,” especially in China, Chief Executive Officer Stephan Winkelmann said in a separate interview in Ingolstadt.

Audi boosted registrations 4.1 percent last year to a record 1 million vehicles, the 13th consecutive increase. The recession may cause sales to drop 10 percent to 900,000 cars and sport-utility vehicles this year, Strotbek said, reiterating the carmaker’s forecast. Audi aims to expand its lineup to 40 models by 2015 from 32 as of mid-2009.

State Rebates

Government-funded rebates in countries including Germany, France and Italy have propped up demand after the recession led Europe’s auto market to shrink in 2008 by the most in 15 years. Deliveries rose in June for the first time in 14 months, the European Automobile Manufacturers’ Association said July 15.

The projected sales improvement from an economic recovery and consumer incentives may be gradual, with smaller cars benefiting more quickly than Lamborghinis and models at Audi’s higher end, the executives said.

Lamborghini imposed working-hour restrictions for almost a third of its 1,000 employees because of the market slowdown, CEO Winkelmann said. “There’s no mercy for the luxury market.”

Audi “is on course” to achieve “significant positive” earnings this year, Strotbek said, declining to be more specific. The division is scheduled to publish second-quarter results on July 31.

“Our sales are developing clearly better than the overall market,” Strotbek said. As with Lamborghini, he cited growth in China as a catalyst.

Audi posted record six-month sales in China in its 100-year history, selling 67,000 vehicles between January and June, a 10 percent increase from a year earlier.

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