Profits for German carmaker Audi plummeted by 37.5% in the first half of the year, the company reported on Monday, citing new US tariffs, restructuring costs and struggling business in China.
Post-tax earnings came in at €1.3 billion in the first six months of the year, the firm, which is part of the Volkswagen Group, said, announcing a third consecutive drop in year-over-year profits.
Back in 2022, the Munich-based carmaker – which also includes the brands Bentley, Lamborghini and Ducati – reported profits of €4.4 billion for the first half of the year.
Audi also lowered its forecast for the current year, with turnover expected to shrink by €2.5 billion to between €65 billion and €70 billion. Meanwhile, the company also expects a significantly lower return on sales.
However, the latest forecast does not yet take into account the trade agreement struck between the European Union and the United States a day earlier, which will see a baseline rate of 15% imposed on imports from the bloc.
Audi said it was currently assessing the expected fallout from the deal, with chief financial officer Jürgen Rittersberger noting that details of the agreement are yet to be revealed.
In principle, however, the carmaker welcomes a deal, he said, as it enables the company to plan ahead.
€600 million burden due to tariffs
The increased US tariffs imposed in April alone burdened Audi with around €600 million in the first half of the year, Rittersberger said.
Unlike its competitor BMW, Audi does not have its own plant in the US and has not passed on the additional costs incurred by the tariffs to its customers in the US.
Rittersberger did not yet say how Audi will proceed, but noted the company will try to find the right compromise between price and volume.
Another reason for the current decline is the cost of restructuring the company, the chief financial officer said.
Audi announced earlier this year that it would cut 7,500 jobs in Germany by 2029 and has already made provisions for this. These provisions burdened the results in the first half of the year with €600 million, although there were already initial positive effects from what the carmaker calls its future agreement, which offset half of this burden.
Full throttle required for transformation
The current figures showed "how necessary the initiated transformation is," Rittersberger stressed, adding that Audi must "continue at full throttle."
In the medium term, Audi aims to save more than €1 billion per year, he said.
Before the figures were released, it had already become apparent that results might have plummeted, after sales had shrunk in the first half of the year, particularly in China but also in the US.
Both markets are currently challenging for many car manufacturers. In China, fierce price competition continues to rage, especially in the electric sector, where Audi is placing its hopes on upcoming new models.
- Audi
- Profit
- Plummeted
Source: www.dailyfinland.fi
