Audi likely to scrap plans for own US plant
German publication Manager Magazin reported on a mid-December meeting of the Audi Supervisory Board that allegedly turned into a ‘showdown.’ During the meeting, Audi CEO Gernot Döllner presented his five-year plan—and, crucially, how it would be financed. According to the report, the figures he presented exceeded the targets set by Group CFO Arno Antlitz. “There are differing accounts and interpretations regarding the size of the gaps,” the magazine stated.One thing is clear: the sums involved run into billions. Döllner has reportedly been tasked with saving five billion euros, though it appears this target is not yet fully secured. An additional two billion euros ‘would still need to be found.’ A major uncertainty in Audi’s expenditure plans for the next five years is the brand’s US production strategy.Currently, Audi does not operate its own production facilities in the US. The overwhelming majority of Audis sold in North America are imported from Europe, with only the Q5 SUV manufactured in Mexico. As a result, the German brand—alongside its VW sister brand Porsche—is fully exposed to US import tariffs. Competitors BMW and Mercedes, with their large plants in Spartanburg and Tuscaloosa, can at least offer part of their US line-up without incurring these duties. It has fuelled Audi’s ambitions for years, with rumours of a dedicated US plant persisting—though plans have reportedly been revised repeatedly. For instance, in June, a standalone US plant was still the favoured option, but by August, Audi was reportedly pushing ahead with the idea of a ‘twin plant’ alongside VW’s Chattanooga factory.The latest development reportedly emerged during the Supervisory Board meeting on 12 December: Döllner is said to have ‘temporarily removed’ Audi’s own US plant from the agenda due to cost concerns, as Manager Magazin reports. The key word here is ‘temporarily,’ suggesting the plan could return if financial conditions improve.Nevertheless, Döllner still intends to produce—or rather, have produced—several Audi models in the US, seemingly confirming two recent rumours. Firstly, at least one ‘larger SUV’ is expected to be manufactured at the US brand Scout’s plant, which is currently under construction. The model will likely use the Scout platform and, as such, may enter the market as a range-extender vehicle—a powertrain configuration Scout is prioritising in its planning.As a second measure, Döllner is reportedly considering producing the MEB-based Q4 e-tron SUV at VW’s Chattanooga plant. The Volkswagen facility in Tennessee is already equipped for MEB model production, having manufactured the US version of the ID.4. These considerations surfaced in recent weeks, when it was revealed that the Cupra Born would continue to be produced in Zwickau long-term, while the VW ID.3 would remain there in the short term. Both model lines were originally slated to move to Wolfsburg, which—alongside the reorganisation of VW ID.4 and ID.5 production—would have left the Audi Q4 e-tron (including its Sportback variant) as the sole model in Zwickau. While the inclusion of Cupra and VW initially improved prospects for the Zwickau site, the potential partial relocation of the Q4 to the US remained a looming threat.It remains unclear whether a final decision has been made. Given such uncertainties surrounding the allocation of production for what was once a highly profitable Audi brand—and the resulting implications for the Group’s investments and plans for other brands—it is unsurprising that the planning round could not be concluded in autumn as usual. According to the report, representatives of the Porsche and Piëch families on the VW and Audi Supervisory Boards are increasing pressure on management. A group-wide investment target of 160 billion euros for the next five years has already been approved, but where and how this money will be spent remains unresolved. Further details are expected from the Board soon.Pressure on Döllner is not only coming from the Supervisory Board but also from within the company. According to Manager Magazin, Audi recently conducted an anonymous internal survey among 3,000 employees to gauge sentiment. Six questions about the expected improvements from Döllner’s reorganisation at Audi were rated on a scale from 1 (‘not fulfilled’) to 6 (‘fully fulfilled’). The highest score achieved was a below-average 2.6, while the lowest was 1.9. Döllner himself reportedly compared the results to a ‘5+’ (equivalent to a failing grade in Germany) during a staff meeting in the development department, indicating that his position may be at risk.manager-magazin.de (paywall)
