Audi barely eked out an operating profit in the third quarter after waning luxury spending in China and a plant restructuring in Brussels dragged on the automaker’s returns.
Operating earnings slumped 91 percent to €106 million ($115 million) in the three months through September, the group said on Nov. 5.
Deliveries of the Audi brand in the first nine months of the year fell in markets including Europe, China and the U.S.
Volkswagen Group’s premium brand group — which also includes Lamborghini, Bentley and motorbike maker Ducati — is facing intensifying competition in China, where buyers gravitate toward local models.
Audi parent VW Group is pursue major cost-cutting plans
A €1.2 billion one-time charge to cover restructuring expenses for an Audi plant in Brussels also weighed on the results.
“We indeed see a very intense price competition in Europe and especially in China,” Audi Chief Financial Officer Jürgen Rittersberger said on a call with reporters.
Sluggish EV demand and intense competition from automakers including Tesla and China’s BYD have pushed Audi parent VW to pursue cost cutting.
The automaker and labor representatives are currently in negotiations over reductions affecting the main VW brand, with possible moves including shuttering factories, laying off workers and cutting wages.
Last week, Audi said it’s in contact with a potential investor for its Brussels factory.
The site may have to close due to high operations costs and poor demand for the sole electric model produced there.
Source: Automotive News, November 5, 2024