Audi slashes full-year forecast by €5 billion as China slump and US tariffs bite, CFO demands deeper cuts

Weaker first half triggers forecast cut

Audi reported its weakest first half since 2021, with revenue of €29.2 billion and an operating margin of just 3.8%. The Volkswagen subsidiary now expects full-year revenue between €58 billion and €63 billion, a €5 billion reduction from the April forecast of €63 billion to €68 billion. The operating margin target was also lowered by one percentage point to a range of 5% to 7%. Profit after tax fell to €1.1 billion, down €220 million from the prior-year period. The first-half revenue was as low as during the Corona crisis in 2021.

China and US tariffs weigh on sales

The slump is driven by a sharp decline in China, where Audi's joint ventures contributed only €73 million in the first half, roughly a quarter of the year-earlier figure. Intense price competition and falling sales in both China and the United States have compounded the pressure. US tariffs imposed under President Donald Trump have further eroded profitability in a key export market.

Cost-cutting push and plant uncertainty

CFO Jürgen Rittersberger acknowledged that existing savings measures are taking effect but are insufficient.

We need to become more competitive and efficient in this environment, work on cost structures and speed up decision-making.

He stressed there would be no rivalry between the German plants in Neckarsulm and Ingolstadt. "If everyone helps, we can organize a future for Neckarsulm."

VW Group CEO Oliver Blume had earlier said that European overcapacity of 500,000 vehicles must be eliminated and that no plant occupancy could be confirmed for Emden, Hannover, Zwickau and Neckarsulm in the 2030s. Blume has also said he wants to avoid plant closures. "There are more intelligent solutions than closing plants. That is always the last option," he stated. Audi is already cutting up to 7,500 jobs by 2029 under a program announced in March 2025, with compulsory redundancies ruled out until the end of 2033. Rittersberger said the job reduction is progressing well.

Neckarsulm rescue plan under discussion

The Neckarsulm plant, which builds only combustion-engine models such as the A5, A6, A7 and A8, currently has an annual capacity of 225,000 units, down from around 300,000 a few years ago. Insiders told Handelsblatt that a further reduction to 150,000 units is being discussed, which would halve capacity compared to 2019. Last year the plant produced about 180,000 vehicles. Rittersberger confirmed that the night shift at Neckarsulm will be eliminated.

On July 9, Blume presented a group-wide savings plan to the supervisory board that could mathematically entail cutting 55,000 to 70,000 jobs and closing four plants. The board rejected the plan by a 7-to-5 vote. Audi's own supervisory board meeting two days earlier was calmer, with a "common understanding" that closing Neckarsulm is not the most sensible solution, though no formal guarantee was given.

Outlook and next steps

Rittersberger expressed hope for a stronger second half, traditionally Audi's better period, aided by new model launches and lower costs. VW CEO Blume aims to finalize his savings package by the end of the year, by which time Audi employees should have clarity on their future. The company continues to adjust capacity to market conditions, with the night shift cut at Neckarsulm already decided.