German carmaker Audi has narrowly avoided slipping into the red after its net profit collapsed by 87 per cent in the third quarter, falling to €95 million from €718 million a year earlier.

Over the first nine months of 2026, Audi's revenue dropped by more than €6 billion to roughly €42 billion, with post-tax earnings settling at €1.22 billion, down 41 per cent, building on a 17 per cent earnings slump already recorded in the first half of the year.

Global deliveries of the core Audi brand plunged nearly 20 per cent in the third quarter, to 314,905 vehicles, driven largely by a collapse in demand for conventional combustion-engine cars in China, long Audi's biggest market. Chinese deliveries, including Hong Kong, fell 24.5 per cent to 328,042 vehicles over the nine-month period, company figures show.

The downturn has deepened financial strain at the Volkswagen Group subsidiary, prompting management to cut its full-year guidance for the second time this year. Executives point to a mix of pressures: domestic Chinese electric vehicle makers undercutting legacy European brands, rising US tariffs, aggressive discounting across European showrooms, Middle East tensions, higher energy costs and Chinese exporters expanding into Europe. North American deliveries fell 17.3 per cent over the first nine months, and because Audi builds no passenger cars in the US, unlike rivals BMW and Mercedes-Benz, tariffs have cost the company an estimated €1.2 billion.

Chief executive Gernot Döllner has responded by proposing a multibillion-euro plant in Macon, Georgia, a $4.2 billion (€3.8 billion) investment that could produce up to 200,000 Q7, Q8 and Q9 models annually from the early 2030s and employ 4,500 people, pending Volkswagen supervisory board approval. The plan has sparked backlash in Germany after Döllner appeared alongside President Donald Trump at a Georgia campaign event ahead of the November 3 midterms, despite Audi's code of conduct barring such appearances near elections. Volkswagen works council chief Daniela Cavallo accused him of "active campaign assistance," while IG Metall leader Christiane Benner called it "politically unacceptable." Left Party leader Luigi Pantisano has demanded his resignation.

Domestically, Audi is cutting up to 7,500 jobs by 2029, with the Neckarsulm plant, employing over 15,000 workers, under review after Volkswagen gave it a year to find savings or face closure. Audi has invoked a 2019 "bad weather clause" to negotiate cost reductions.

At operating level, the core brand posted a €174 million quarterly loss versus a €279 million profit last year. Chief financial officer Jürgen Rittersberger called the situation urgent, saying "the need for action at Audi is high and brooks no delay." Audi has cut its full-year revenue outlook to €55-59 billion and trimmed its operating margin forecast to 3-5 per cent.

Source: Brussels Signal

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