Audi Plots 2020 Comeback Helped by New Models, Cost Cuts
Audi Plots 2020 Comeback Helped by New Models, Cost Cuts
(Bloomberg) -- Audi AG’s new sales chief said the premium arm of Volkswagen AG is ready to win back ground lost to luxury-car leaders Mercedes-Benz and BMW AG, building on a revival in demand toward the end of 2019.
Audi’s fortunes will be boosted by a young product lineup, robust market for upscale autos and far-reaching restructuring program, Hildegard Wortmann said in an interview at the Consumer Electronics Show in Las Vegas.
“We want to attack again,” said Wortmann, 53, who joined Audi six months ago from BMW. “Deep changes are needed, but I see great willingness across the organization to turn things around, and that makes me optimistic.”
Audi, the biggest profit contributor at the world’s largest automaker, is shuffling management and aims to trim its German workforce by about 15% through 2025 to lift earnings by 6 billion euros ($6.7 billion) and keep pace with a shift toward electric cars and digital services like ride-hailing.
“Everyone kept talking for years about industry disruption. Now it’s here,” Wortmann said.
Audi has been struggling to emerge from the turmoil of the 2015 diesel-cheating scandal, with sales last year held back by production bottlenecks linked to more-complex emissions test procedures in Europe. It wants to get profit margins back to about 10% from the 7% to 8.5% forecast for 2019.
The world’s No. 3 premium-car brand is seeking a fresh start after culling a third of its engine-gearbox combinations and ceasing production of the TT coupe, to be replaced by a battery-powered successor. It may also terminate the R8 roadster and make the flagship A8 sedan all-electric.
“It’s a sign of courage to stop making icons like the TT that have shaped the brand and create new ones like the E-Tron GT for a new era,” Wortmann said.
There’ll be “stumbling blocks” along the way, she added, as Audi confronts the technical challenges of electric cars. The E-Tron SUV, touted as a rival to the Tesla Inc. Y model, was first delayed then hit by a recall just after its launch.
Audi intends to boost its electric lineup to about 10 hybrids and 20 battery-only cars by 2025, more than at Mercedes-Benz and BMW. That will initially weigh on margins as combustion-engine autos still generate higher returns.
VW in November announced another BMW alumnus, Markus Duesmann, as chief executive officer. He starts in April, replacing Bram Schot, who succeeded long-time CEO Rupert Stadler after his arrest in connection with the diesel crisis.
To contact the reporter on this story: Christoph Rauwald in Las Vegas at crauwald@bloomberg.net
To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, Christopher Jasper, John Bowker
©2020 Bloomberg L.P.