Audi is planning to place its employees in a financially challenging situation.
Automakers are cutting costs left and right, and Audi seems to be next in line for some serious belt-tightening. According to reports, the head of Audi's automotive group is planning to save a billion euros annually in personnel costs. The brand's head, Gernot Döllner, wants to slim down Audi, making it leaner and more efficient in an attempt to boost profits. However, exact details about this cost-saving plan have yet to be revealed.
The struggle at Audi isn't unique to this subsidiary of the Volkswagen Group. Recently, the profit margin was well below five percent. In a bid to return to double-digit margins by the end of the decade, Audi is currently in negotiations with the works council about further savings. One of the prerequisites for an agreement on the savings plan, as per the overall works council, Jörg Schlagbauer, is an extension of job security beyond 2029.
Audi is also rumored to be discussing a shift in strategy—a "flattening of the learning curve in electromobility." This secret change of course is reportedly the subject of discussions between the board and employees. Amid these potential modifications, the production of a new combustion engine model in Ingolstadt is also on the table.
As the industry transitions to electromobility, companies must navigate substantial costs associated with technology development and manufacturing process changes. Audi's move to save costs and become more efficient could be a part of this broader industry trend. Strategies for cost reduction include variabilizing personnel costs, supply chain optimization, and modular production. Additionally, investing in electric vehicle technology, enhancing supply chain resilience, and collaboration with partners can aid in managing these high transition costs.
Therefore, while Audi specifically hasn't disclosed its cost-cutting measures, the company's broader transition strategies suggest that it might follow similar cost management approaches as other automakers adapting to the electromobility era.
Other automakers are also implementing cost-saving measures, and Audi's Savings plan might incorporate strategies like variabilizing personnel costs, supply chain optimization, and modular production, as seen in the electromobility era. The shift towards electromobility at Audi might include a 'flattening of the learning curve', which could involve discussions with employees about electromobility technology. Despite these changes, the production of a new combustion engine model in Ingolstadt is still under consideration for Audi's Döllner, who wants to maintain the savings while boosting profits.
