Audi looks west amid slump in Chinese demand

Audi’s ahead-through-engineering days are long behind it, at least to judge by the bumpy week just gone.

On Friday, the VW subsidiary slashed its earnings forecast by 87 per cent in the third quarter, blaming the ongoing decline in its Chinese market meltdown paired with chafing Chinese inroads into Europe.

With Audi’s foreign sales down by a fifth, a little creative accounting secured a tiny Q3 profit of €87 million and kept the Ingolstadt luxury car brand out of the red for another three months.

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It is Audi’s second such forecast cut this year, with maximum revenues of €59 billion now likely, down €4 billion from its previous forecast.

For Audi chief financial officer Jürgen Rittersberger, the message of the dire numbers was clear: “Enormous pressure to act at Audi will wait for no one.”

He was echoing chief financial officer Arno Antlitz a day earlier at Audi’s VW parent, as he revealed a €5.86 billion third-quarter loss at the firm as it looks to find €31 billion in cost savings.

At an Audi board meeting on Friday, managers were said to be praying for miracles from their US chief executive Gernot Döllner. The 57-year-old became a household name in Germany this week after a high-profile election campaign appearance alongside US president Donald Trump in Georgia.

Döllner was there to announce Audi’s first plant in the southern US state: a €4 billion investment promising 4,500 new jobs to produce up to 200,000 SUVs annually from 2030. Reportedly the largest such investment in Georgia’s history, Trump was quick to take credit for the “incredible” investment and linked it all to his administration’s tariff regime.

Those tariffs will be eased, according to the Wall Street Journal on Friday, for car companies like Audi that commit to manufacturing in the US.

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Germany’s powerful IG Metall trade union denounced Döllner’s appearance as a “flagrant breach of his own company’s rules, which expressly require political neutrality in the run-up to elections”.

Döllner had “allowed himself to be turned into a puppet in the propaganda show” of Trump, according to the union.

The US subsidiary insisted the appearance had been cleared with Ingolstadt beforehand and that it “accepted this invitation solely with Audi’s best interests in mind”.

Given the looming corporate cliff edge, it looks like Audi has decided to go for broke – figuratively, of course.