Audi cuts annual forecast – China weakness and US tariffs weigh on results

The Chinese market was hit particularly hard: Including Hong Kong, deliveries collapsed by around 19 percent to 232,227 vehicles. The China business, which due to local joint ventures is booked in financial result, contributed only 73 million euros in the entire first half – a minus of 74 percent compared to the same period last year, when the contribution was almost four times as high. Audi itself emphasized that worldwide deliveries excluding China had remained almost at the prior-year level. In North America, deliveries also fell by just under 17 percent to 82,187 vehicles; according to the company, US tariffs are weighing on business there.

China and USA as problem children

Worldwide, Audi delivered 727,245 vehicles in the first half, around 7.2 percent fewer than the 783,531 units in the same period last year. That is roughly 55,000 vehicles fewer than in the first half of 2025. After-tax profit in the second quarter fell by around 21 percent to 563 million euros. Operating profit in the half-year nevertheless rose slightly from 1,087 to 1,122 million euros, and the operating return on sales improved from 3.3 to 3.8 percent.

The problems are now also affecting the German sites. At the Neckarsulm plant, the night shift will be eliminated starting in November, affecting around 1,200 employees. According to media reports, production capacity has already been reduced to 225,000 vehicles per year – around 75,000 fewer than in earlier years. Under certain circumstances, capacity could in future fall further to a maximum of 150,000 vehicles. According to company information, almost 3,200 employees gathered recently in Neckarsulm; around 800 unionists and IG Metall stewards protested against possible savings plans.

Pressure on Neckarsulm and Ingolstadt

CFO Jürgen Rittersberger confirmed the elimination of the night shift and at the same time presented considerations to secure the site by reducing capacities both in Neckarsulm and in Ingolstadt. "Wir haben Möglichkeiten, an beiden Standorten die Effizienz zu steigern", sagte Rittersberger. "Wir müssen in dem Umfeld, in dem wir uns bewegen, wettbewerbsfähiger und effizienter werden, an den Kostenstrukturen arbeiten und Entscheidungsprozesse schneller hinbekommen." There would, however, be "kein gegeneinander der beiden deutschen Standorte."

The Ingolstadt works council declared its solidarity with Neckarsulm: "Neckarsulm ist Teil der Audi-DNA – darüber wird nicht verhandelt." The works council is calling for the consistent implementation of the existing future agreement, which provides for job security until the end of 2033 and excludes redundancies for operational reasons. This had been extended in March of last year together with the announcement of the elimination of up to 7,500 jobs by 2029. Rittersberger said progress on the job-cutting plans was going well. According to an insider speaking to the Handelsblatt, up to 1,000 jobs could be saved through the consolidation of divisions.

CEO Gernot Döllner sought to emphasize unity: "Audi ist ein zentraler Baustein des Konzerns - und Teil der Lösung". "Unser gemeinsames Ziel ist ein langfristiger, tragfähiger Fahrplan für die Zukunft." Audi has already "Mut zur Erneuerung bewiesen." Rittersberger emphasized that the geopolitical framework conditions were increasing the pressure to act: "Um im internationalen Wettbewerb zu bestehen, müssen wir gemeinsam mit dem Volkswagen-Konzern unser Geschäftsmodell neu ausrichten und weitreichende strukturelle Verbesserungen realisieren."

Volkswagen Group's cost-cutting course

The background is also the austerity course of parent company Volkswagen, whose profit in the second quarter had collapsed by around one third. Group CEO Oliver Blume had recently said in an internal interview that overcapacity of 500,000 vehicles would have to be eliminated in Europe. "Es gibt intelligentere Lösungen, als Werke zu schließen. Das ist immer die letzte Option." According to information from the Group, VW is examining the elimination of tens of thousands of additional jobs and wants to finalize its savings package by the end of the year.

Four VW Group plants are reportedly under review, including the Audi plant in Neckarsulm. There had previously been reports of possible closures after 2030 that had triggered unrest. The Audi works council continues to insist on the future agreement remaining in force. Rittersberger expressed confidence for the second half: it is traditionally the stronger half, and new models should provide a boost.

Hopes pinned on new models

In the second half, Audi is primarily relying on the new Audi Q9, a full-size SUV designed specifically for the US market, scheduled to launch in North America and Europe in the fourth quarter of 2026. Also announced is the battery-electric Audi A2 e-tron, which will be presented as an entry-level model in autumn 2026. Neckarsulm is positioning itself as a future competence center for artificial intelligence and digitalization.

Europe remains a growth driver

Outside the problem markets, the picture looks different: In Germany, deliveries rose by just over 4 percent to around 108,000 vehicles, and in Europe excluding Germany by just under 6 percent. Demand for electrified models is particularly striking: Deliveries of battery-electric models grew by 23 percent to more than 25,000 units, and plug-in hybrids by as much as 147 percent. In Western Europe, Audi recorded an overall order increase of 7 percent, and of 117 percent for PHEV models. Spain recorded a plus of 21 percent, Italy 17 percent, and the United Kingdom 10 percent.

On the stock exchange, investors initially reacted cautiously positive: VW shares gained 1.62 percent at times in XETRA trading to 72.62 euros. The Audi Group had published its half-year results on Monday, presenting the significantly reduced annual forecast. The target range for net cash flow of 3 to 4 billion euros remains unchanged, which according to the company underscores the focus on liquidity security.

With an operating margin of 3.8 percent in the first half, Audi would have to operate significantly more profitably in the second half to reach the new guidance. Döllner and Rittersberger nevertheless see the 5 to 7 percent range as achievable – not least because of the new models and lower costs. Whether this calculation will hold up will become clear at the latest with the Q3 figures in October.