Audi Pledges to Intensify Efficiency Measures as It Cuts Guidance

By Dominic Chopping

Audi cut its full-year guidance and pledged to intensify measures aimed at boosting competitiveness as market conditions worsen.

The German automaker, which is part of Volkswagen Group, has been working to cut costs and become more efficient, but it said Friday that it will go further after seeing a noticeable decline in vehicle deliveries, revenue, and operating profit in the first nine months of the year.

Audi last year closed its Brussels plant and outlined plans to cut up to 7,500 jobs over the next few years while also taking measures to increase productivity, speed and flexibility at its German sites, targeting more than 1 billion euros ($1.12 billion) of savings a year in the medium term to counter headwinds from U.S. tariffs and intense competition in China.

It has also undertaken a model refresh, launched its China-exclusive AUDI brand, and plans new cars tailored to its core markets.

In a statement Friday, it said costs and complexity are now being further reduced, efficiency boosted significantly across its entire footprint, and investments targeted toward future areas of growth that includes new products, technologies such as software, artificial intelligence, and driver-assistance systems, and growth markets.

"We are taking the current economic situation as a mandate to consistently renew Audi," said Chief Executive Gernot Doellner. "To this end, we are setting clear priorities: reducing costs while increasing quality and productivity."

The company is grappling with a market downturn in China, intensifying competition, and growing pressure from Chinese brands in Europe. The transition to electric vehicles in Europe is also adding to competitive and transformational pressures while higher energy costs due to the Middle East conflict, U.S. tariffs, and the brand's shift to a new entry-level lineup are also weighing on results, it said.

Audi is also working to tailor new models to its core markets and a few days ago announced plans to establish its first U.S. production site, investing $4 billion in a plant designed to produce up to 200,000 vehicles a year from the 2030s. With the plant, Audi is planning to spur growth in the country with a locally-made premium SUV tailored to North American customers.

It said further measures are to be developed to ensure the long-term competitiveness and employment of its German sites, which will be discussed with labor representatives.

"There is an urgent need for action at Audi," said Chief Financial Officer Juergen Rittersberger.

"The environment became significantly more challenging, particularly in the third quarter. Our measures are having an effect, but given the immense competitive pressure, we must intensify them."

Audi group--which comprises the Audi, Bentley, Lamborghini and Ducati brands--said it now expects revenue this year to land between 55 billion and 59 billion euros, from earlier guidance of between 58 billion and 63 billion euros.

The operating margin is now seen at between 3% and 5%, from 5% to 7% previously.

Net cash flow is projected at 2.5 billion to 3.5 billion euros, from 3 billion to 4 billion euros.

For the first nine months of the year it said it registered operating profit of 1.15 billion euros, down from 1.56 billion euros in the same period a year prior, as revenue fell 13% to 42.06 billion euros.

It logged an operating margin of 2.7%, down from 3.2%, and net cash flow of 2.44 billion euros.

Write to Dominic Chopping at dominic.chopping@wsj.com

(END) Dow Jones Newswires

October 30, 2026 04:26 ET (08:26 GMT)