The Ingolstadt car manufacturer Audi reduced due to US President’s tariffs Donald Trump (79) and the displacement of a joint with Porsche developed its forecast. The profit margin will now be between 4 and 6 percent this year, it said Volkswagen-Daughter on Friday. So far it has been one percentage point more.
Chief Financial Officer Jürgen Rittersberger also justified the move with current market developments. He left it open as to how the returns could continue in the long term. Audi is currently busy implementing its new strategy. In this context, the ambitions for future return targets would also be reviewed.
Operating profit increased – but only due to special charges in the previous year
In the third quarter, the Progressive brand group, which includes Audi as well as Bentley, Lamborghini and Ducati, increased its after-tax profit to 718 million euros, 2.6 times the previous year’s figure. However, the significant increase is primarily due to the very weak comparable quarter. A year earlier, Audi had to report a fall in profits of almost four-fifths – partly due to the costs of closing a factory in Brussels.
If you compare the current figures with the 1.2 billion euro profit in the third quarter of 2023, they no longer look so good. Rather, they are on a similar scale to the weak first two quarters of the current year.
In the first nine months of the current year, the brand group’s profits shrank by around a quarter to 1.6 billion euros. The return fell to 3.2 percent from 4.5 percent. The main brand Audi only managed a return of 1.8 percent. Rittersberger justified this, on the one hand, with the costs of the restructuring, which totaled 300 million euros – the company had announced in March that it would cut 7,500 jobs. Provisions for CO₂ regulation also played a role.
US tariffs cost Audi billions
However, a large part of the decline in profits can be attributed to US President Trump’s tariffs. Rittersberger said that alone has cost Audi around 850 million euros so far, or a return of 2 percentage points. For the year as a whole, he expects tariffs to cost 1.3 billion euros. Audi does not yet have its own production in the USA, but imports its vehicles from Mexico and Europe. Rittersberger emphasized that a decision about setting up US production should be made this year.
Porsche also had A drastic strategy shift was announced in mid-September and postponed the introduction of a large electric SUV. Audi had planned the electric successor to the A8 luxury class sedan on this platform. The luxury sedan is in danger of becoming a youngtimer.
The company now has to reconsider which platform and type of drive the vehicle will come with, said Rittersberger.
Bad numbers in the German auto industry
However, Audi’s figures are even better than its parent company Volkswagen. At the group level, Wolfsburg had one on Thursday reported a loss of almost 1.1 billion euros – among other things, because Porsche is another VW subsidiary achieved significantly worse figures as an Audi.
Among the problems China and US tariffs, the rest of the German auto industry is also suffering. Mercedes had one for that reason, among other things Profits have fallen by a third. BMW will only present figures next week. They are also likely to be rather weak – at the beginning of the month, the Munich-based company issued a profit warning just hours after announcing its sales figures – especially because things in China were worse than expected.
Nexperia crisis not yet priced in
The situation in the German auto industry remains tense – especially since Nexperia has recently become another worrying issue that has not yet been reflected in the current financial figures. After the takeover of the semiconductor manufacturer by Netherlands The Chinese owner Wingtech banned the export of chips produced in China. Delivery bottlenecks are now looming because the auto industry is dependent on chips from China. Next to Bosch it could too Short-time work occurs at the supplier Aumovio.
Audi itself is cautious when it comes to predictions about Nexperia. Production is currently running according to plan and supplies are provided, says Rittersberger, but the issue is very complex. And a spokeswoman adds: You are never immune to short-term changes.