Audi is reviewing its plan to stop introducing new petrol models from next year, as a “delayed transition” to electric vehicles pushes the premium carmaker to cut 7,500 jobs — 14 per cent of its German workforce.
The Bavarian company, which is part of the Volkswagen Group, on Tuesday said it was no longer certain it would meet a previous target of launching its final new combustion engine car in 2026 and ending sales of such vehicles outside of China entirely by 2032.
“With the delayed transformation towards electric mobility we have to assess those dates and deadlines,” said chief executive Gernot Döllner.
His comments came as Audi revealed that operating profits last year had dropped 38 per cent from 2023 to €3.9bn, as it delivered 12 per cent fewer cars to customers.
The group, which includes the Bentley, Lamborghini and Ducati brands, on Tuesday said it expected its operating margin to recover moderately this year, rising from 6 per cent last year to a range of 7 to 9 per cent — compared with 9 per cent in 2023.
The company, which in recent years lost ground in the important Chinese and European markets, said it still had ambitions to grow in the US despite the onslaught of tariffs.
Audi added it would over the coming weeks assess potential countermeasures, including the option of passing on a share of added costs to customers.
The group has, much like parent company Volkswagen, been hit hard by weakening demand for its cars amid the costly transition to electric vehicles and intensifying competition from Chinese EV start-ups.
The Ingolstadt-based company said late on Monday that it had reached a deal with the powerful union IG Metall to shed 7,500 jobs in Germany by 2029. The agreement will rely on voluntary redundancy packages and pre-retirements, as Audi promised workers no lay-offs until 2033.
Reached after months of tense negotiations, the deal will spare Audi from the risk of temporary strikes that last year plagued VW, before Europe’s largest carmaker walked back on threats to close several plants and took other steps to reduce capacity, including a gradual cut of 35,000 jobs by 2035.
The crisis in Germany’s automotive sector — the country’s largest industrial employer — has shaken the nation to its core, fuelling fears of creeping deindustrialisation in Europe’s largest economy.
Audi last month closed its 75-year-old plant in Brussels that had been producing the Q8 e-tron — the car that in 2018 became Audi’s first electric model.
While the launch of the Q8 e-tron was initially successful, Audi quickly lost momentum in its EV ramp-up as the launch of other important models, such as the Q6 e-tron, suffered delays from VW’s failed attempt to develop key automotive software in-house.
But Döllner said Audi would by the end of this year have “the youngest portfolio” among its competitors, following the launch of more than 20 new models within two years such as the Q6 e-tron and the Audi Q3.
Despite Audi’s significant cost cuts in Germany, which Döllner said would lead to savings worth €1bn in the medium term, the company still remained committed to join Formula 1 from next year.
The sport’s “reach and popularity is increasing considerably”, Döllner said, adding that the reasons behind its 2022 decision to acquire Swiss racing team Sauber were “still applicable”.
