2026-05-05 11:30
publication
2026-05-05 11:30
Audi is at a crossroads. The German giant is implementing a rigorous plan to “slim down” its structure to face declining sales in China and the specter of drastic tariffs in the US. Will the announced cuts and new models be enough to save the margin and regain market position?
Faced with declining demand in the key Chinese market and rising international trade costs (read – tariffs), Audi is entering survival mode. The manufacturer from Ingolstadt is not limited to theoretical plans – real actions are already underway. Mark has reduced production capacity in its German factories and is consistently implementing an employment reduction strategy, which is to cover as many as 7,500 positions by 2029. All this to become a “lighter” and more agile player in an increasingly difficult macroeconomic environment.
The biggest question mark currently remains the situation overseas. The US president's announcements to increase tariffs on European cars from 15% to 25% make managers in Germany shake their hands. For Audi and sister company Porsche, brands that are heavily dependent on exports, such a move would represent a huge financial blow. According to Bloomberg Intelligence estimates, an additional 10 percentage points of duty could cost the brand up to EUR 444 million. Audi's CFO, Jürgen Rittersberger, admits directly: “it is clear that this would pose a significant burden on our results.”
Despite these adversities, CEO Gernot Döllner does not intend to give up and is focusing on a product offensive. A key element of the strategy is to be the introduction of the Q9 model – the largest SUV in the brand's history, which is to challenge such giants as Mercedes GLS or Cadillac Escalade.. Interestingly, the Q9 will be produced in Slovakia, which makes this model directly exposed to US customs restrictions. At the same time, Audi is investing in a dedicated brand of electric cars in China, trying to regain the title of innovation leader in the extremely competitive market there.
In the background, there is an ongoing debate about the wisdom of building an Audi factory directly in the USA. Although the Volkswagen Group has plants in Tennessee, Audi is still hesitant to make its own investment in local production. The group's president, Oliver Blume, points out that the company cannot afford to pay high customs duties and costly expansion of production capacity at the same time. This is a difficult dilemma, especially since competitors such as BMW and Mercedes have been producing their SUVs on American soil for years, which gives them a huge logistical and tax advantage.
The current financial situation of the Audi Brand Group (which also includes Lamborghini, Bentley and Ducati motorcycles) shows how long the company is away from stability. The planned operating return of 6-8% collided with the reality of the first quarter, which brought a margin of only 4.2%. To fill this gap, the company intends to drastically simplify its portfolio. The coming months will show whether this rejuvenation treatment will allow Audi to recover in a world dominated by trade wars.
Prepared by JM
