¡Hola México! Aquí estámos, Audi!

Peter Koltai, Director Production Control/Logistics

Audi Mexico S.A. de C.V.

27.01.2016

Audi México AUDI Group and VW Group

AudiGroup

Audi México

Audi México The Audi-Group production network 2000

Ingolstadt Győr

(Hungary)

Neckarsulm

Sant‘Agata Bolognese

(Italy)

Changchun

(China)

Audi México The Audi-Group production network 2015 – 17 Production Sites

Ingolstadt

San José Chiapa

(Mexico/from 2016)

Manaus

(Brasil)

Curitiba/

São José dos Pinhais

Foshan

(China)

Chiang Mai

(Thailand)

Kaluga

(Russia)

Győr

(Hungary)

Bratislava

(Slovakia)

Brüssel

(Belgium)

Martorell

(Spain)

Changchun

(China)

Neckarsulm

Jakarta

(Indonesia)

Aurangabad

(India)

Bologna

(Italy)

Sant‘Agata Bolognese

(Italy)

San José Chiapa

Curitiba

Changchun

Foshan

Jakarta

Aurangabad

Kaluga

Martorell

Brüssel

Neckarsulm

Ingolstadt

Győr

Bratislava

Sant´Agata

Audi México The Audi Production Network grows parallel to Sales

[thd. cars/y]

Neckarsulm

Ingolstadt

2.250

0

1.000

750

500

250

1.250

1.500

1.750

2.000

2011 2007 2005 1993 1988 1985

San José Chiapa Győr I

Changchun

Foshan

Curitiba

2014

2015

2016

Brüssel

Martorell

Bratislava

Aurangabad

Jakarta

Kaluga

2013

Győr II

1998

Sant´Agate

1

Audi México AUDI AG: Product portfolio

*Market Introduction in Germany, Date: March 2015

Q7 R8 Coupé

Q3 RS Q3

A1 A1 Sportback S1 S1 Sportback

A4 allroad quattro A4 Avant A4 Limousine RS 4 Avant S4 Avant S4 Limousine

A6 Avant A6 Limousine A6 allroad quattro

RS 6 Avant S6 Avant

S6 Limousine

A7 Sportback RS 7 Sportback S7 Sportback A8

A8 L A8 HEV S8

TT Coupé TT S Coupé TT Roadster TT S Roadster

A3 A3 Limousine A3 Sportback

A3 Sportback g-tron

RS3 Sportback S3 S3 Cabriolet S3 Limousine S3 Sportback

A3 Cabriolet

A5 Cabriolet A5 Coupé A5 Sportback S5 Coupé S5 Sportback S5 Cabriolet

RS 5 Cabriolet RS 5 Coupé

Q5

SQ5

A3 Sportback e-tron

Q5 HEV

54 models

Audi México First Premium Car Manufacturer in Mexico

Audi México Why Mexico?

10 Free Trade Agreements with 48 countries

Strategic position acting as the bridge between South- and North America

Attractive location for automotive industry (Volkswagen de México since 1964)

Production Site in the Dollar-Region - independence of exchange rate fluctuations

Basic information

Employees: >2.000 (Dec. 2015)

Start of Production: 2nd half-year 2016

Investment: >1.3 Bn. USD

Model: Q5 Successor

Location and facts of Audi México

San José Chiapa

Assembly Body Shop Pre Series Center

Press Shop Paint Shop

Sept. 2012: Decision on Location San Jose Chiapa, Puebla

Since 2013 Audi establishes a full functional production

From 2016: Start of new Q5 Production, yearly capacity: 150,000 vehicles

Aprox. 1,500 Training sessions of employees in the new Trainingscenter per year

Very Environmentally-friendly factory, investment of aprox. 18 Mil. USD for a water project

Segments

Facts

Location and facts of Audi México

San José Chiapa

Audi México Why Puebla?

Infrastructure Streets, Ports, Airports, Railroad

Labour Stability

Safety

Suppliers

Human Capital High Education Level

Why the Audi Q5 model?

Audi México Why the Audi Q5?

Rising demand in the SUV-Segment

SUV Market is a major part of Audi’s

Growth Strategy

Reduced Delivery-Times for customers in North- and Southamerica

Bestseller: Audi Q5

SUV Premium Sector Market Competitors (sales worldwide 2014)

0

100,000

200,000

300,000

Audi Q5 BMW X3 Mercedes GLC

2016

Grand Opening

2015

Preparation, incl. Inauguration of Production Halls

2011 2012 2013 2014

Search for location

Location chosen Foundation stone ceremony

Inauguration of Training Center

Audi México Milestones

Construction time: two years

JIS-Supplier Park

FINSA-Park

„Model City“

Plant Audi

México

Trainingscenter

Expansion

Audi México Status of plant by December 2015

Audi México Logistics Concept Inbound material flow

Supplier A

Supplier B Hamburg, DE

Veracruz

Supplier A

Supplier B

Legend

CrossDock

Seaport

Customs 65%

35%

Inbound Transportation

NARNetwork

SeafreightEuropa

Asia Manzanillo

0.1m3

0.95m3

33.35m3 1.91m3

Audi México Logistics Concept Inbound – new transport concept according to Europe

Transport Network

NAR

Common VW and Audi Transport Network in North America Synergies between the 4 VW Group factories

Chattanooga

Puebla

Silao

San José Chiapa

Audi México Production Control Concept

Client

Supplier

Demand Planning

Rough tar-get figure

Body shop Paint shop Assembly

3-4 weeks

2-3 weeks 6 days

5 months

Determination of sequence

Incoming goods

Empties

JIS

JIS-Park

► Overseas material through

Containeryard

► North American material

through Traileryard

► Warehouse close to assembly

hall

► Empties directly to supplier

through warehouse

► New in automotive industry in

Mexico: a factory with very

high complexity of parts and

individuality of cars

Containeryard

Traileryard

Audi México Logistics Concept Inhouse

Audi México Required adaptations for Audi México

Rear Unloading

New technology: inflatable doors

100% Rear Unloading within the plant Audi Mexico

100% Side Unloading within the existing Audi plant

Audi México Required adaptations for Audi México

New measures für Universal Load Carrier

European Basic Measurements Adaptation due to Global Audi inhouse logistics concept

Mexican Carriers (example)

American Heights Adaptation due to truck sizes

910mm

Audi México Audi´s new technology

► 100% of containers sent to supplier will be

equipped with RFID Tags

► Information on:

► container type number

► owner‘s DUNS number

► container ID

► Benefits:

► Tracking and tracing of the containers

► Inventory management

► Improved maintenance

► Prevention of loss of containers

Container Tag

Audi México Logistics Concept Outbound Distribution Network Audi México

Jacksonville

Davisville

San Diego

Houston

Nuevo Laredo/

Laredo

Juárez/

El Paso

Patio

Central

(VW Puebla) Legend

Rail

Truck

Ship

Factory

Port

Europe

Africa

USA

South America

Middle East

Turkey

Asia

Pacific

Veracruz

Lázaro Cárdenas

First 5 destinations

78%

22%

Transport Split

Sea

Land

86%

14%

Distribution ex plant

Rail

Truck

47%

38%

3% 8% 2%

2%

Volume distribution

Europe

North Am.

South Am.

Asia

Australia

Africa

Audi México Qualification Concept

600 Audi Mexico employees sent to Germany for training

Expat Qualification

Training for local direct (7 weeks) and indirect employees (5 weeks) since 2014

Onboarding in Trainingscenter

Specific trainings for Logistics process

Qualification in Profiraum

Audi México Challenges for Audi

Different Infrastructure conditions

Challenge for the packaging planning – adaptions of packaging

Example of Special Load Carrier

Audi México Challenges for Audi and our JIS-Suppliers

Long supply time of European material

Call Supply Time

11 weeks

M/PL, 17.12.2015

8 weeks

Production of Q5 Successor

Call Supply Time

4 weeks

Vehicle Production Plan

We have to call before we fix the production plan

Audi México Incentives State-Government Puebla

Leveling Phase I and II

Piping

Trainingscenter

Energy Supply

Fire & Police Station

Wastewater- Treatment

Hospital

Audi-Highway, Link- & Ring Road

Railroad Connection

Site Office

State Incentives

Audi México Challenges

Challenges

• Limited Capacity at Veracruz

Port

• Limited Transport Capacity

for FBU

• Challenging media

connection

• Challenging Construction

Quality

• Limited parking lots

• Limited rail infrastructure

• Limited berth availability

• Limited rail car equipment

• Limited truck equipment

• Telecommunication on-site

• Improving electricity supply in the

industrial area

• Rework at the halls

Specifications

San José Chiapa

¡Hola México! Aquí estámos, Audi!