(March 17): Volkswagen AG’s upmarket brand group led by Audi sees rising profitability this year on new models like the Q9 SUV and efficiencies to help offset tariffs and competition in China.
The collection of premium nameplates, including Lamborghini, Bentley and Ducati motorcycles, anticipates an operating return in a range of 6% to 8%, according to a statement on Tuesday. That’s up from last year’s 5.1%.
Parent VW is seeking to turn around its Audi brand, alongside its struggling Porsche marque. The two luxury manufacturers, historically a bedrock for returns for Europe’s biggest carmaker, have seen profits plummet due to expensive backtracking on electric vehicles, US tariffs and sliding sales in China.
On Tuesday, chief financial officer Jürgen Rittersberger said Audi’s long-term goal was to get back to double-digit returns by 2030 “step by step", according to remarks during a media briefing. Last year, the brand’s operating return fell to 3.9% partly because of tariffs and a costly reversal of EV ambitions.
For the luxury brand group, US tariffs totalled €1.2 billion last year while provisions relating to compliance for CO₂ regulation also weighed. The manufacturer said it’s on track for 7,500 cut jobs at its sites in Germany by 2029.
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Looking ahead, Audi is banking on a range of new products to drive sales. In Europe, the compact electric A2 e-tron will tap growing EV demand while the full-size Q9 sport utility vehicle is specifically designed to cater to US tastes. The world’s second biggest passenger car market has been disappointing because of a lack of large SUVs in the company’s lineup and sales slumped last year.
Deliveries are also declining in China, where the likes of BYD Co and Xiaomi Corp are edging ahead with advanced EV technology and lower prices, though the pace of the sales drop slowed to 5% last year. Audi will introduce its second model from a China-only sub-brand in cooperation with partner SAIC at the Beijing car show next month, the AUDI E7X SUV.
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