Volkswagen AG (VOW)’s Audi division, the world’s second-biggest maker of luxury cars, plans to spend 22 billion euros ($30.3 billion) through 2018, pushing models such as electric autos to gain the top spot in the premium segment.

About 15.4 billion euros, or 70 percent of the total, will be invested to develop new models and technology, the Ingolstadt, Germany-based carmaker said today in a statement. Audi targets selling 2 million cars and sport-utility vehicles annually after achieving a goal of delivering 1.5 million autos in 2013, two years ahead of its original plan.

“We are now decisively steering toward our next milestone,” Chief Executive Officer Rupert Stadler said in the statement. “This is why we’re keeping our foot on the gas pedal regarding investments.”

The budget is equivalent to spending 4.4 billion euros a year, an increase from a previous plan that called for investing 4.3 billion euros annually on new models and expanding production capacity. The VW unit aims to overtake Bayerische Motoren Werke AG as the world’s biggest luxury-car producer by the end of the decade. Audi’s expansion is part of Volkswagen’s 84.2 billion-euro investment program to beat Toyota Motor Corp. (7203) and General Motors Co. (GM) in global sales.

BMW Expansion

BMW is seeking to fend off challenges by Audi and Mercedes-Benz with its own expansion. The Munich-based carmaker is introducing 25 models in 2013 and 2014 including 10 vehicles, such as the Rolls-Royce Wraith, that have no predecessor. BMW said in November that its spending will exceed targets this year and continue at a high rate in 2014.

Daimler AG’s Mercedes, which ranks third in the luxury segment, plans 13 all-new models by the end of the decade, while Audi is widening its SUV lineup. Stuttgart-based Daimler said today that it will invest 200 million euros in a vehicle-technology and testing center in the southern German town of Geisingen-Immendingen.

Audi plans to increase its product range to 60 models by 2020 from about 49 currently. The third generation of its TT coupe is scheduled to go on sale next year, joining newly introduced electric- and natural gas-powered variants of the A3 Sportback, the carmaker said today. Audi will also add to its SUV lineup with the subcompact Q1 in 2016.

To meet anticipated demand for its vehicles, the manufacturer is adding production in China, Brazil and Mexico, in addition to upgrading its German plants.

“With this investment program we are launching our next stage of growth,” Audi Chief Financial Officer Axel Strotbek said in the statement.

(Source: Bloomberg)