Audi profits collapse: Trump tariffs also play a role

Ingolstadt. US President Trump's tariffs, costs for the company's restructuring, and weak business in China caused Audi's profit to plummet in the first half of the year. €1.3 billion after taxes represents a loss of 37.5 percent, according to the VW-owned subgroup, which also owns Bentley and Lamborghini. This is the third consecutive year that the first half of the year has been significantly worse than the previous year. In 2022, the Ingolstadt-based company reported a profit of €4.4 billion.

Audi is also lowering its forecast for the current year. Revenue expectations have shrunk by €2.5 billion to between €65 and €70 billion, and profitability is also expected to be considerably lower. However, this does not yet take into account the EU's tariff agreement with the US. This is currently being evaluated, the company said. CFO Jürgen Rittersberger said they have no details or anything in writing yet. However, the company is generally pleased that they now have predictability.

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The US tariffs, which were increased in the spring, alone cost Audi around 600 million euros in the first half of the year, Rittersberger said. Audi, which, unlike competitor BMW, does not have its own factory in the US, did not pass on the additional costs caused by the tariffs to its US customers, but such a step is costly. Rittersberger has not yet said how things will proceed in this regard – they will try to find the right compromise between price and volume.

The CFO cited the costs of restructuring the group as another reason for the current decline. In the spring, Audi announced, among other things, the elimination of 7,500 jobs in Germany by 2029 and had already set aside provisions for this. These impacted earnings in the first half of the year by €600 million, but the initial positive effects of the so-called future agreement have already offset half of this impact.

The current figures demonstrate "how necessary the initiated transformation is," Rittersberger emphasized. They must continue "at full speed." In the medium term, Audi aims to save more than one billion euros per year.

It had already become apparent that the figures could be challenging again. Sales shrank in the first half of the year, particularly in China but also in the USA. Both markets are currently challenging for many automakers. In China, fierce price competition continues, especially in the electric segment. Audi is hoping for new models there.

RND/dpa