UPDATE 2-VW's Audi says new models, factories to weigh on profit
* 2014 op margin within 8-10 pct range vs 10.1 pct in 2013
* 2014 sales to rise above 50 bln euros
* May assemble more cars abroad than in Germany for 1st time
* Mercedes to shrink sales gap to Audi - IHS (Adds company, analyst comments, details, background, shares)
By Andreas Cremer
INGOLSTADT, Germany, March 11 (Reuters) - German luxury carmaker Audi, source of nearly half of Volkswagen's profits, expects another drop in operating earnings this year as it invests in new models and foreign expansion in a bid to catch up with sales at luxury rival BMW.
Audi has been closing the gap on BMW thanks to models such as the A3 compact and Q5 sport utility vehicle (SUV).
But its product cycle has peaked, just as Europe's auto market emerges from a six-year sales slump and Daimler's Mercedes-Benz steps up the battle in the premium car market with a flurry of new vehicles.
That has led some analysts to question whether Volkswagen's (VW) flagship brand will meet its goal to overtake BMW's sales by 2020. Continuación...