(March 18): Volkswagen AG’s Audi will cut as many as 7,500 positions in Germany by 2029 as the automaker tries to shore up its flagging profitability.

The reductions, which correspond to roughly 14% of the brand’s German workforce, won’t affect factory workers. Audi pledged to invest around €8 billion (US$8.7 billion or RM38.7 billion) in its German locations during the period. It’s also introducing new cars to better compete in the US and China, where its sales have slumped.

“The pressure to change is at an all-time high, with competition that has dramatically changed,” the brand’s chief executive officer Gernot Döllner said Tuesday in Ingolstadt.

Volkswagen CEO Oliver Blume is slashing spending across the group to become more competitive. The latest move brings the total number of potential job reductions at Europe’s biggest automaker to more than 40,000. Audi’s deliveries declined 12% last year as it struggled in markets including China.

By the end of next year, the brand plans to introduce ten new models in the US, where its vehicle sales fell 14% in 2024. In China, Audi has started making the Audi Q6L e-tron electric SUV at a plant in Changchun with local partner FAW and will produce additional cars there for local customers from mid-2025.

Audi is also adding ten new plug-in hybrid vehicles by the end of this year amid slowing demand for its fully electric models.

“The future of our portfolio is electric, but we need flexibility,” Döllner said.

The staff cuts at Audi follow similar moves across the Volkswagen group. Late last year, Blume struck a deal with unions to cut capacity and 35,000 staff at the namesake VW brand in Germany, where labour and energy is expensive. Porsche AG plans to cut 1,900 positions as it contends with muted luxury demand in the key Chinese market.

Audi’s Ingolstadt factory will manufacture another entry-level electric model, the brand said late Monday, adding that it’s studying the possibility of making an additional vehicle at the Neckarsulm site.

The staff reductions at Audi will happen without firings, the company said.

Uploaded by Magessan Varatharaja