Car industry Slump in profits and cautious outlook at Audi
Audi's profits are collapsing. In 2024, the after-tax profit of the Ingolstadt-based VW subsidiary plummeted by 33 percent to 4.2 billion euros, as the Group announced. This is the second significant decline in a row.
18.03.2025, 11:33
18.03.2025, 11:47
SDA
The figure relates not only to the core brand, but also to the Audi sub-group, which also includes Bentley, Lamborghini and Ducati. Audi is responding to the current difficulties with job cuts, as was announced on Monday evening.
"A year ago, we said that 2024 would be a year of transition. Unfortunately, that has come true in full," said Audi CEO Gernot Döllner about the figures. The challenges have not become any smaller. Weak demand meets increased supply - especially in China.
In 2024, Audi - like many other car manufacturers - had suffered from weak demand and price wars in China, among other things. In the first half of the year, the Ingolstadt-based company also experienced problems with a lack of parts for larger engines, as well as high provisions for the closure of the plant in Brussels. The slump in sales of the core brand Audi also had an impact on turnover, which fell by almost 8 percent to 64.5 billion euros.
Smaller brands doing better
The three smaller brands in the Audi Group, on the other hand, performed better and significantly boosted earnings. Each of them achieved significantly higher operating returns than the core brand Audi - above all Lamborghini, which was in a league of its own with a margin of 27 percent, as CFO Jürgen Rittersberger said. In contrast, the margin at Audi was only 4.6 percent.
Although Audi wants to increase sales, turnover and returns again in 2025, this will not be easy. "We still have a tough road ahead of us," said Rittersberger. "The markets remain highly competitive." In addition, there is still a reluctance to buy in China, where Audi only expects sales to move sideways. However, new models should help. Döllner said that more than 20 would be launched on the market in 2024 and 2025.
Another risk for Audi is the current customs policy in the USA. In the short term, there is only limited leverage here, he said. Audi may therefore have to increase prices in the USA.
Not alone with slump in profits
Audi is not alone in the slump in profits. The two premium competitors BMW and Mercedes-Benz have also reported falls, as has the parent company VW. However, compared to its arch-rivals from Stuttgart and Munich, which have fallen from extremely high profits due to a special situation characterized by corona and chip shortages, Audi is performing rather weakly.
Although Mercedes' profits fell by 28 percent, they still amounted to 10.4 billion euros, while BMW's profits fell by 37 percent to 7.7 billion euros. Both figures that Audi can currently only dream of.
And so Audi is following a trend that is widespread in large parts of the industry and is cutting jobs. On the eve of its annual results, the car manufacturer announced the reduction of up to 7,500 jobs in Germany by 2029, albeit without compulsory redundancies.
There are also to be further financial cuts - among other things, employee participation will be restructured and additionally reduced for some time. In the medium term, Audi expects to save at least one billion euros per year.
After a long struggle, an agreement has been reached with the employee side on implementation, which includes an extension of job security until the end of 2033 and a bonus for members of IG Metall.
Profit-sharing is already falling significantly
The current forecast for 2025 does not include the redundancy measures. However, it is also still unclear whether costs or savings will predominate in the current year.
The cut has not yet taken effect in the employee profit-sharing scheme for 2024, which will be paid out in the current year. At EUR 5,310 for a skilled worker, it is nevertheless much lower than a year ago in view of the weaker business performance, as it is dependent on the operating result, among other things. A year ago, it was still 8,840 euros.
