Audi earnings hit in tough 2024 - and 2025 "will not be any easier"

Audi earnings took a substantial hit in a "very challenging" 2024, and company bosses say that this year "will not be any easier". The Volkswagen Group's 'Progressive' brand family, led by Audi, delivered 1.7 million vehicles in 2024, down 12% on 2023, and contributing to a 7.6% dip in overall revenues to €64.5 billion. Meanwhile, operating profit margin dipped from 9.1% to just 6.0% - compared to 8.1% at Mercedes-Benz and 7.7% at the BMW Group over the same period, for context. Revealing the company's performance at a press conference in Ingolstadt, company CEO Gernot Döllner said "2024 was definitely a year of transition", and said that "exactly what we forecasted has actually happened". Citing issues including supply bottlenecks, global political tensions and increased Chinese competition as inhibitive factors, he pointed to 2024's performance as a motivation to "make Audi future-proof again", with a wide-reaching overhaul of the company's product line-up, production network and overall organisation. "Global economic changes and intensified international competition are posing major challenges to Audi and the industry as a whole," he said. "We are facing this reality with the courage to break new ground and with confidence in our traditional strengths." The plan to put Audi back on a growth trajectory began in 2024 with the appointment of new high-ranking officials – including CTO Geoffroy Bouquot and design boss Massimo Frascella – as well as the launch of important new model lines and various operational changes. Most significant among these is the announcement that Audi will axe 7500 jobs in Germany by the end of 2029 as part of a drive to cut operational costs by more than €1bn annually. That news followed shortly after the closure of the company's factory in Brussels, Belgium, where it built the Q8 E-tron SUV - with restructuring expenses related to this closure also impacting profits. Döllner said the company will "remain committed to our path for renewal" in 2025, with a particular focus on adding new models, cementing its foothold in the US and China, and improving efficiency across the entire organisation. But chief financial officer Jurgen Rittersberger offered a cautious outlook for 2025, saying this year "will not be any easier - quite the contrary". "The economic environment has deteriorated, and in particular the German economy has performed weakly and is in a sustained recession," he said, adding that electric vehicle uptake is being dampened by a "certain consumer reluctance", which is slowing Audi's push to completely electrify its line-up. Further factors including CO2-reduction rules for car makers in various global markets and the imposition of new trade tariffs mean that 2025 "will again be a very challenging year for us," said Rittersberger. Nonetheless, he emphasised that the introduction of the crucial new-generation Audi A6, A5 Q3 and Q5 models in 2025 will help to mitigate the impact of these headwinds. By the end of this year, Audi says it will have the youngest portfolio of its segment, with more than 20 new cars launched in 2024 and 2025. "Amid a difficult environment with intensified competition and a sluggish economy, we kept Audi on track in 2024 and closed out the year on a financially sound footing," said Rittersberger. "However, we still have a tough road ahead of us." Forecasting that 2025 will "continue to be a volatile and challenging environment", the Audi Group expects "slightly weaker overall growth compared with 2024"; the company anticipates to generate revenues of €67.5-72.5bn, with a margin of between seven and nine percent. The Audi Group comprises Audi, Bentley, Lamborghini and Italian motorbike manufacturer Ducati - and revenues and profits were heavily down across the portfolio except in Sant'Agata, with Lamborghini posting a profit uptick of 15.5% to €835 million, off the back of a 5.7% increase in sales volumes. Bentley, meanwhile, delivered 22% fewer cars last year than in 2023, with revenue falling 10% and profits taking a 37% hit at €373 million.