Audi earns 87% less, and pressure on its Neckarsulm plant grows
On 30 October Audi reported after-tax profit of €95m for the third quarter, down from €718m a year earlier, and cut its targets for the year.
The margin range for 2026 falls to 3-5 per cent; the finance chief says the need for action is high. That raises pressure on the Neckarsulm site, for which Audi has already invoked its bad-weather clause.
What happened
According to dpa-AFX, a German news agency, after-tax profit fell by 87 per cent to €95m in the third quarter. After nine months profit stands at €1.22bn on revenue of €42bn. Audi now expects revenue of €55bn-59bn for 2026 instead of €58bn-63bn, and an operating margin of 3-5 per cent instead of 5-7 per cent. Among the reasons the company cites American tariffs and uncertainty from the situation in the Middle East. Jürgen Rittersberger, the finance chief, said the measures were working but had to be stepped up because of competitive pressure. By comparison, Mercedes earned €1.52bn in the same quarter. In early October Audi invoked a clause dating from 2019 for Neckarsulm that allows talks with the works council on savings; according to Börsen-Zeitung, a financial daily, Audi is thereby preparing job cuts. Closure of the plant is being discussed, according to dpa, but has not been decided. Assessment: at the same time Audi is investing about $4bn in a new American plant in Georgia. Capital is moving to where tariffs loom.
What follows
For employees in Neckarsulm and at suppliers around Heilbronn the outlook becomes less certain. Each savings round at a carmaker of this size passes through to orders for mid-sized firms. Banks heavily exposed to car suppliers in Baden-Württemberg will need to reassess their risks. In the metalworking wage round the slump gives employers arguments for low settlements. Whether Audi does better in the fourth quarter, as it has signalled, remains open. What is clear is that investment is currently flowing to the American plant rather than to German sites.
What changes in practice
- Employees in Neckarsulm
- Audi is negotiating savings at the site. Closure is being discussed but has not been decided.
- Suppliers
- Lower revenue targets at Audi mean fewer orders. Mid-sized firms in the region feel it first.
- Regional banks
- Loans to car suppliers in Baden-Württemberg become riskier if carmakers keep cutting costs.
What to watch
- Outcome of talks on Neckarsulm with the works council
- BMW's quarterly results next week
- Order reports from suppliers around Heilbronn
Sources
- dpa-AFX via ARIVA: VW-Tochter Audi rutscht fast in die roten Zahlen, Ziele gesenkt
- 20 Minuten: Audi-Gewinn bricht um 87 Prozent ein
- Börsen-Zeitung: Schlechtwetter in Neckarsulm, Audi bereitet Stellenabbau vor
- dpa-AFX via ARIVA: Audi veröffentlicht Ergebnisse für das dritte Quartal (Vorbericht, US-Werk)