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Chinese Price War And Declining Demand Cause Audi’s Profits To Decline
Audi reported a third lower profit last year, the second sharp profit drop in a row. Volkswagen’s luxury brand, like other European carmakers, is struggling with weakening sales, rising costs, and growing competition from China.
Net profit fell to 4.2 billion euros in 2024, while sales fell by 8 percent to 64.5 billion euros. Audi already announced on Monday a reorganization in which around 7,500 jobs in Germany will be cut by 2029. This will reduce the workforce in Germany by 14 percent.
Audi is particularly affected by falling demand for electric cars and price wars in China. In the first half of the year, the company, based in Ingolstadt north of Munich, struggled with a shortage of engine parts. Profit was also depressed by provisions for the closure of a factory in Brussels, it emerged on Tuesday.
The brand is facing “immense challenges,” Audi CEO Gernot Döllner said a day earlier. He wants to cut back mainly on his administrative and development departments. The reorganization, which should yield annual cost savings of 1 billion euros, will not affect factory employees. The company employs around 88,000 people worldwide, 55,000 of whom are in Germany.
Audi announced last month that its Brussels plant, considered the heart of the German automaker’s electric drivetrain, is closing, with around 3,000 people losing their jobs.
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