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Audi to invest $29 bn through 2019 to chase BMW's top spot

Audi will spend Euro 24 billion ($29 billion) to develop technology and expand production, boosting its five-year investment plan by Euro 2 billion as it chases BMW for the top spot in luxury-car sales.

About Euro 16.8 billion, or 70 per cent of the total, is earmarked for new models like the Q1 subcompact sport-utility vehicle, the Ingolstadt, Germany-based unit of Volkswagen AG said in a statement. Audi expects to sell a record of more than 1.7 million autos this year.

"We are making large investments in the innovative areas of electric mobility, connectivity and lightweight construction," Chief Executive Officer Rupert Stadler said in the statement. The brand intends to increase its lineup to 60 models by 2020 from 50.

Audi, the No. 2 in global luxury-car sales, aims to surpass BMW AG's namesake brand in deliveries by the end of the decade. The race tightened this year. BMW outsold Audi by just 42,600 cars in the first 11 months of 2014 compared with 54,600 a year earlier. Audi's budget is part of Volkswagen's Euro 85.6 billion-investment programme to beat Toyota Motor Corp. in global auto-industry sales.

Audi plans to spend the equivalent of Euro 4.8 billion a year, an increase from the previous rolling five-year plan that called for investing Euro 4.4 billion annually on new vehicles and expanding production capacity. "Despite the growth in total investment, we will keep a watchful eye on the upcoming challenges and exercise the required cost discipline," Chief Financial Officer Axel Strotbek said. Audi, which already outsells BMW in China and Europe, is aiming to catch up in the US.