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Audi Slashes Profit Outlook Again Amidst Fierce Competition
30 Oct
Summary
- Audi lowered its annual profit margin forecast for the second time this year.
- The carmaker cited intense competition in China and US tariffs as major pressures.
- Audi's nine-month profit saw a significant 41% drop to 1.22 billion euros.
Audi has issued its second profit warning of the year, now projecting an annual profit margin between three and five percent. This revised forecast marks a significant decrease from earlier expectations and reflects mounting challenges.
The premium German automaker is grappling with intensified competition, particularly in the crucial Chinese market. Additionally, tariffs imposed by the United States are adding to the financial strain, impacting overall profitability.
In the first nine months of the year, Audi's profit plummeted by 41%, reaching 1.22 billion euros. This substantial decline underscores the difficult market conditions the company is currently facing.
These setbacks for Audi increase the pressure on its parent, Volkswagen Group, which is undertaking broad restructuring efforts, including significant job reductions across its brands by 2030.
Audi has announced plans to cut 7,500 jobs, and the future of its plant in Neckarsulm, Germany, remains uncertain. In response to these pressures, Audi is also investing in a new SUV factory in Georgia, USA, seeking to bolster its presence in the growing American market.
This US investment, announced alongside remarks by then-President Donald Trump, has drawn criticism from German unions and politicians. Unlike key rivals, Audi lacks a US manufacturing base, making it more vulnerable to trade policies.
