The German car manufacturer Audi has slipped into the red due to the high costs of closing its factory in Brussels. According to information from Tuesday, the overall loss in the third quarter was 168 million euros. Chief Financial Officer Jürgen Rittersberger justified the loss with the provisions for Brussels of 1.2 billion euros, which were booked in the summer. Operationally, however, things went well, he said. Audi particularly benefits from the fact that the delivery bottlenecks for certain engines for more powerful vehicles have been overcome, said Rittersberger.
Since the start of the year, the brand with the four rings has achieved an operating return of 2.5 percent – that is just a third of what was achieved a year ago. Including the higher-margin brands Bentley, Lamborghini and Ducati, the return is 4.5 percent – only half as high as the previous year. Nevertheless, Audi is sticking to its forecast for the year as a whole and is still expecting a range of 6 to 8 percent, it said. Audi should benefit from lower costs for raw materials, for example, said Rittersberger.
Sales fell
Sales for the brand group as a whole fell by 4 billion euros to a good 46 billion euros in the first three quarters, and operating profit fell to 2.1 billion euros from 4.6 billion euros. Bottlenecks in V6 and V8 engines caused problems for the company, particularly at the start of the year. But electric cars were also less in demand.
Audi boss Gernot Döllner spoke of a tougher competitive environment. The company delivered almost 11 percent fewer cars worldwide than a year ago. Audi expects improvement with new models that are scheduled to come onto the market by 2025.
Because demand for the luxury-class electric car Q8 etron is lower than expected, the vehicle will be discontinued at the end of February 2025 and therefore earlier than expected. The plant in Brussels is therefore on the verge of closure. Audi is currently negotiating with a possible investor, which, according to information from company circles, is a commercial vehicle manufacturer.
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**Interview with Jürgen Rittersberger, CFO of Audi AG**
**Interviewer**: Thank you for joining us, Jürgen. Audi is facing some significant challenges, particularly with the Brussels plant situation. Can you share more about the impact of the plant’s potential closure on the company’s overall financial health?
**Jürgen Rittersberger**: Thank you for having me. Indeed, the situation at the Brussels plant has had a notable effect on our financial results. In the third quarter, we reported a substantial loss of 168 million euros. This was primarily due to the provisions we set aside for the plant’s closure, which amounted to around 1.2 billion euros. While operationally we are doing well, the decision to close the facility has understandably overshadowed our financial performance.
**Interviewer**: With the prospect of losing around 1,500 jobs from the Brussels plant, there must be concerns from both employees and unions. What is your message to them during this difficult time?
**Jürgen Rittersberger**: We fully understand the concerns of both employees and unions. We are actively exploring options to find a buyer for the plant, and we are committed to supporting our workforce through this transition. We recognize the significant impact this will have on the community and are doing everything possible to mitigate job losses.
**Interviewer**: You mentioned that operationally, things are going well. Can you elaborate on that? What are some positive developments within Audi despite these challenges?
**Jürgen Rittersberger**: Certainly. Despite the difficulties, we’ve overcome previous bottlenecks related to V6 and V8 engines, which has improved our operational efficiency. Additionally, we expect to benefit from lower raw material costs, which should positively impact our margins moving forward. We’re also banking on our new models set to launch by 2025 to revitalize our sales figures, particularly in a competitive market.
**Interviewer**: Speaking of sales, I understand that Audi experienced a drop in sales this year. What are your expectations for the coming quarters, especially with the anticipated new models?
**Jürgen Rittersberger**: Yes, our sales did decline, down by about 4 billion euros this year. However, we’re optimistic about the future. With the introduction of new models in the luxury electric segment, we believe there will be a resurgence in demand. While we’ve had to discontinue the Q8 etron due to lower-than-expected demand, we are confident that our upcoming offerings will resonate better with consumers.
**Interviewer**: Thank you for your insights, Jürgen. It seems Audi is at a crossroads, but with careful planning, there may be brighter days ahead.
**Jürgen Rittersberger**: Thank you. We’re dedicated to navigating these challenges and remain hopeful for the future of Audi.
