Audi Sees Tough U.S. Market Until Fourth Quarter

DETROIT (Reuters) - Audi AG (NSUG.DE: Quote, Profile, Research) expects a tough market for U.S. auto sales until at least the fourth quarter but sees no signs that the U.S. economy is slipping into recession, a senior executive said on Tuesday.

"We certainly are seeing an economic contraction, but we don't speak of recession," Audi Executive Vice President Johan de Nysschen told reporters on a conference call.

He added: "We're facing seven to nine tough months ahead of us."

Audi Chief Executive Rupert Stadler said the German premium automaker would not respond to weakness in the U.S. market by raising incentives. "As an organization we have decided not to buy market," Stadler said.

Audi expects the market for diesel-driven vehicles to grow to represent some 10 to 15 percent of the U.S. auto market by 2015, a trend that it expects will boost its share as well.

Audi has set a target of topping 100,000 vehicle sales in the United States in 2008, up from 93,500 in 2007 when sales grew by 3 percent.

Beyond that, Audi intends to double its U.S. sales volume to 200,000 by 2015 as it strengthens its U.S. dealer base and rolls out up to 15 more models, executives said.

A new version of Audi's flagship A4 model, which represented almost 40 percent of U.S. sales in 2007, will be launched in the U.S. market in the third quarter.

The sedan and a wagon version -- the Audi A4 Avant -- are expected to compete with luxury vehicles from Toyota Motor Corp's (7203.T: Quote, Profile, Research) Lexus, and Daimler AG's (DAIGn.DE: Quote, Profile, Research) Mercedes-Benz and BMW.