Audi to Work With Volkswagen on Major Restructuring After Weak Second-Quarter Results
Audi will work closely with parent company Volkswagen Group on a broad restructuring plan aimed at improving competitiveness after reporting weaker second-quarter financial results, driven by declining sales in China and the United States.
The premium automaker also lowered its full-year outlook, citing challenging market conditions, geopolitical uncertainty, and ongoing pressure in key international markets.
Audi Faces Growing Market Challenges
Audi Chief Financial Officer Juergen Rittersberger said the company must realign its business model and implement structural changes alongside Volkswagen to remain competitive globally.
According to the company, rising costs, slowing demand in major markets, and increasing competition are forcing the automaker to accelerate efficiency measures across its operations.
The restructuring effort forms part of Volkswagen's wider strategy to improve profitability and reduce costs across its brands.
China and U.S. Sales Weigh on Results
Audi reported second-quarter revenue of €15.0 billion, a 12.5% decline from the same period last year.
Operating profit fell 3% year-over-year to €533 million, resulting in an operating margin of 3.6%, well below the company's revised annual target of 5% to 7%.
The company attributed the weaker performance primarily to slowing sales in China and the United States, as well as continued uncertainty linked to geopolitical tensions in the Middle East.
Neckarsulm Plant Under Review
Audi confirmed it is continuing efforts to adjust production capacity at its Neckarsulm manufacturing plant in southwestern Germany.
The facility currently operates below previous production levels and has already reduced output through measures including the elimination of a night shift dedicated to combustion-engine vehicle production.
The plant is among several German manufacturing sites that could face significant restructuring as Volkswagen evaluates its long-term production network beyond 2030.
Volkswagen Pursues Wider Cost-Cutting Plan
Volkswagen recently reported a decline in second-quarter profit while indicating early signs of stabilization across parts of its business.
The company is expected to continue discussions with employee representatives over restructuring plans as Chief Executive Officer Oliver Blume seeks to improve efficiency, reduce costs, and strengthen the group's long-term competitiveness.
Industry analysts say Volkswagen's restructuring efforts come as European automakers face increasing competition from Chinese manufacturers, changing consumer demand, and ongoing trade-related pressures.
