August 3, 2018 / 10:54 AM / a year ago

Audi steps up production ahead of new pollution rules

FILE PHOTO: An Audi logo is pictured during the Volkswagen Group's annual general meeting in Berlin, Germany, May 3, 2018. REUTERS/Axel Schmidt/File Photo

FRANKFURT (Reuters) - Audi has stepped up production ahead of a September deadline when it becomes harder to register vehicles as roadworthy, the German premium carmaker said on Friday.

From next month, vehicles need to pass new pollution rules known as the Worldwide Harmonized Light Duty Vehicles Test procedure, or WLTP. Cars which are registered for sale ahead of this deadline can still be passed on to dealerships after September.

The Ingolstadt-based manufacturer said it had ramped up production ahead of the deadline and therefore does not expect to see a drop in vehicle deliveries this year, even as it faces problems adjusting its portfolio.

“The company expects significant fluctuations during the year in production, inventories and deliveries, as well as in its key financials,” Audi said in a statement accompanying its latest financial results.

“In this context, the first half of the year featured a significant increase in production levels for anticipatory stockpiling.”

Several manufacturers including Audi parent Volkswagen (VOWG_p.DE) and rival Daimler (DAIGn.DE) have said margins may suffer because of delays getting their fleet ready for the new road certification standards.

Audi added it expects its research and development expenditure ratio to be slightly above the long-term target corridor of 6.0 to 6.5 percent of sales.

Audi also assumes that the capital expenditure ratio will be also be slightly above its target level of 5.0 to 5.5 percent.

Reporting by Edward Taylor; Editing by Keith Weir

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