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Audi's Profit Plummets Over 37% Amid Tariff Challenges and ...
2025-07-28 22:55:10
Automotive
Business

Audi's Profit Plummets Over 37% Amid Tariff Challenges and Restructuring

Audi's profit has significantly declined, dropping over a third as it grappled with new U.S. tariffs, high restructuring costs, and disappointing sales in China. The luxury automaker reported a surplus of 1.3 billion euros, a 37.5 percent decrease compared to the previous year.

In response, Audi has lowered its annual forecast and emphasized the necessity of its ongoing transformation to achieve substantial savings. Meanwhile, European luxury brands are also bracing for potential tariff impacts, fearing a decline in demand and increased prices.

The U.S. auto industry is undergoing a strategic shift due to tariffs, prompting companies like Kia to adjust manufacturing locations to mitigate financial losses. This evolving landscape reflects the broader challenges faced by automakers amid persistent trade tensions.

Related news on that topic:

Audi's Profits Plummet 37.5% Amid US Tariffs and Job Cuts

Audi, a prominent division of Volkswagen, has reported a significant decline in profits for the first half of the year, with a drop of 37.5% to 1.3 billion euros. This downturn is primarily attributed to several challenging factors. Among these are the imposition of US tariffs, which have posed a substantial financial burden on the company without a manufacturing presence in the United States to offset these costs. Additionally, the expenses associated with the group’s restructuring efforts have also contributed to the decreased profitability. This restructuring includes a plan to cut 7,500 jobs in Germany by 2029, aiming to save over one billion euros annually in the medium term. Another critical aspect affecting Audi’s performance is the fierce price competition in China, particularly within the electric vehicle sector. Despite notable growth in electric vehicle sales, the challenging market conditions in China have led Audi to lower its profit forecast for the year. This decision reflects the broader difficulties the company faces in maintaining its competitive edge in a rapidly evolving global automotive market. The company’s strategic transformations are essential for future sustainability and profitability. These efforts, however, are set against the backdrop of ongoing trade tensions and tariff disputes, notably between the US and the EU, which continue to loom over the automotive industry. As Audi navigates these complex challenges, its commitment to significant cost-saving measures and strategic realignment will be crucial in adapting to the changing economic landscape.

How Will New US-EU Trade Deal Impact Germany's Automotive ... Industry?

The recent trade agreement between the United States and the European Union has sparked significant controversy, particularly within Germany's automotive industry. The deal, which imposes a 15% tariff on most European exports to the US, has been met with criticism and concern. The German automotive industry, represented by the VDA association, foresees billions in extra costs, which could further burden the sector already in a challenging transformative phase. The agreement, although seen as a step towards avoiding an escalating trade war, presents substantial challenges to the German economy. Experts warn of potential job losses and shifts in supply chains as industries adjust to the new trade terms. The high steel and aluminum tariffs remain a point of contention, and economic leaders urge the EU to adopt a more robust negotiating strategy. Despite the relief from the threat of higher tariffs, the deal has not been universally welcomed. Markus Söder, leader of the CSU, calls for compensatory measures to alleviate the economic strain on German businesses. He suggests implementing an industrial electricity price to mitigate energy costs and argues for an "Economic Deal" that emphasizes reduced bureaucracy and increased economic freedom. Furthermore, the deal has broader implications for other sectors. The German wine industry, heavily reliant on exports to the US, fears a significant impact due to the tariffs. Meanwhile, the automotive sector, a cornerstone of the German economy, faces a strategic crossroads as it grapples with these new trade barriers. While the agreement brings a degree of predictability, it also highlights the complexities of balancing international trade relations with domestic economic interests. As negotiations continue, the focus remains on mitigating adverse effects and exploring new trade opportunities globally.

Read 4 more recent news on this topic

The press radar on this topic:

The Street
28. Juli 2025 um 11:02

Another automaker is forced to shift strategy due to tariffs TheStreet Daily Newsletter

The U.S. auto industry has seen a shift in recent years, with foreign automakers like Toyota, Hyundai, and Kia gaining significant market share. However, the industry is facing challenges due to tariffs imposed by the Trump administration. Kia is adjusting its manufacturing strategy, prioritizing vehicles made in the U.S. and redirecting Korean-made cars to Canada to avoid tariffs. Other automakers, including U.S. giants Ford and GM, are also experiencing the impact of tariffs, with GM reporting..
stern
28. Juli 2025 um 07:02

Automotive Industry: Audi's Profit Drops by More Than a Third

US tariffs, costs for the group's restructuring, and weak business in China have caused Audi's profit to plummet in the first half of the year. At 1.3 billion euros, the surplus was 37.5 percent lower than in the previous year, as the sub-group, which also includes Bentley and Lamborghini, reported.
heise online
28. Juli 2025 um 13:02

Audi's profit in the first half of the year fell by more than a third | heise autos

Audi's profit in the first half of the year fell by more than a third. The reasons for this are the new import tariffs of the USA, high costs for the group's restructuring and weak business in China. Audi is therefore lowering its forecast for the current year. The Chief Financial Officer emphasizes that the initiated transformation of the company is necessary and that they have to continue at full speed in order to save more than one billion euros per year in the medium term.
EL PAÍS
28. Juli 2025 um 16:18

European Luxury Giants Take a Breath Amid Fears of Harsher Tariffs with the U.S.

European luxury groups such as LVMH (25% of sales in the U.S.), Kering, and Hermès are concerned about the 15% tariff on their main market. They can raise prices (33% between 2019-2023), but the decline in demand (1-3% in 2024, the first drop in 15 years; a loss of 50 million customers in 2 years) and prior high prices are affecting their results. LVMH has local production in the U.S. to optimize flows.
CW

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