A Plan to Save Audi

Once Volkswagen’s star performer, Audi has become one of Wolfsburg’s biggest problems. Revenues at the premium automaker dropped four percent in the first half of the year, and the diesel emissions scandal just keeps on growing, threatening to take down Audi’s senior leadership.
The money and legal problems are only part of the problem. Audi lags woefully behind the competition in developing electric cars and implementing a plan to go digital. It has just two all-electric models in the pipeline, both SUVs, compared to 10 at Daimler and six at BMW.
Embattled Audi CEO Rupert Stadler and his strategy chief Roland Villinger have a plan to dig Audi out of the ditch. They are going to roll out a massive cost-cutting program that aims to save the automaker €10 billion ($11.7 billion) through 2022, according to Handelsblatt sources at the company.
“Everything that the customer no longer demands or pays enough for will be canceled,” a source at Audi’s headquarters in Ingolstadt told Handelsblatt.
For Audi engineers, who are used to being lavished with funding, these changes will come as a major culture shock.
The idea is to plow those savings into five new all-electric vehicles, company sources said, in addition to the two electric SUVs that Audi already has in the works. Mr. Villinger recently presented the plan to 700 managers. Audi, for its part, declined Handelsblatt’s request for comment.
The money will come from ditching niche models, such as the Cabrio, and engines that sell poorly. Audi also plans to reduce costs by relying more on the production capacity of other VW subsidiaries as opposed to building or expanding its own plants. The automaker has already outsourced the production of the A1 compact car to its sister company Seat in Spain. In other words, Audi will not be building any more plants like the $1.3-billion facility that opened in Mexico last fall for the production of the Q5 SUV.
The plans do not stop there. Audi also wants to save money by pooling development costs across the VW group. The premium automaker will rely on the VW core brand to help develop an all-electric Q1 as well as another small city car and a vehicle in the A3 compact class. Audi is not even above working with its sibling rival Porsche, which will help develop electric versions of the A8 and the A9.
A Plan to Save Audi A Plan to Save Audi Reviewed by Alexander Von Stern on 02:05:00 Rating: 5