The Volkswagen Group has completed its planning round for the next five years, although with a delay, but has not yet presented any results. This is likely also due to the situation at Audi, where CEO Gernot Döllner is said to have abandoned plans for a standalone US plant, but not for Audis built in America.
The 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 of euros. Döllner has reportedly been tasked with saving €5 billion, though the target does not appear to be fully secured yet. An additional €2 billion “would still need to be found”. A significant uncertainty in Audi’s expenditure plans for the next five years is the brand’s US production strategy.
From standalone to ‘twin plant’
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 Group 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 fueled Audi’s ambitions for years, with rumors of a dedicated US plant persisting, though plans have been revised repeatedly.
For instance, in June, a standalone US plant was still the favored option. Still, 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 keyword here is ‘temporarily,’ suggesting the plan could return if financial conditions improve.
With the help of VW
Döllner still intends to have several Audi models produced in the US, seemingly confirming two recent rumors. Firstly, at least one ‘larger SUV’ is expected to be manufactured at the Volkswagen Group 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 (REEV), a powertrain configuration that Scout is prioritising in its planning because of its purported greater interest among the American public than pure BEVs.
Management under increasing pressure
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 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.
