Audi recorded a 37.5% drop in half-year profit

The profit of the German car manufacturer Audi sharply fell by 37.5% in the first half of the year, the company announced on Monday, citing new US tariffs, restructuring costs, and business problems in China, UNN reports with reference to dpa.

Details

Profit after tax was 1.3 billion euros ($1.5 billion) for the first six months of the year, the company, part of the Volkswagen Group, announced, marking its third consecutive year-on-year profit decline.

Back in 2022, the Munich-based carmaker, which also includes the Bentley, Lamborghini, and Ducati brands, reported a profit of 4.4 billion euros for the first half of the year.

Audi also lowered its forecast for the current year, with turnover expected to decrease by 2.5 billion euros to 65-70 billion euros. Meanwhile, the company also expects significantly lower sales profitability.

However, the latest forecast does not yet take into account the trade agreement concluded between the EU and the US the day before, which provides for a basic rate of 15% on imports from the bloc.

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Audi stated that it is currently evaluating the expected consequences of the agreement, and CFO Jürgen Rittersberger noted that the details of the agreement have not yet been disclosed.

However, in principle, the carmaker welcomes the agreement, he said, as it allows the company to plan ahead.

According to Rittersberger, the increase in US tariffs introduced in April alone burdened Audi by approximately 600 million euros in the first half of the year.

Unlike its competitor BMW, Audi does not have its own plant in the US and did not pass on the additional costs incurred due to tariffs to its customers in the US.

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Rittersberger has not yet said how Audi will proceed, but noted that the company will try to find the right compromise between price and volume.

Another reason for the current downturn is the cost of the company's restructuring, the CFO said.

Earlier this year, Audi announced that it would cut 7,500 jobs in Germany by 2029 and had already set aside appropriate provisions. These provisions burdened the first-half results by 600 million euros, although there were already initial positive effects from what the carmaker calls its future agreement, which offset half of this burden.

The current figures showed "how necessary the initiated transformation is," Rittersberger emphasized, adding that Audi must "continue to work at full capacity."

In the medium term, Audi aims to save more than 1 billion euros per year, he said.

Addition

Before the figures were published, it was already clear that the results could fall sharply after sales declined in the first half of the year, especially in China, but also in the US. Both markets are currently challenging for many car manufacturers. In China, fierce price competition continues, especially in the electric vehicle sector, where Audi is pinning its hopes on future new models, the publication notes.

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