German car maker Audi has said it plans to cut 7,500 jobs by 2029 as it contends with hot competition from China and dampened demand for new vehicles.
Rather than making major cuts now – equivalent to about 8% of the firm’s global workforce – Audi said it would handle the job reductions gradually over the next four years. Audi CEO Gernot Döllner said the move was part of efforts to increase competitiveness and boost profitability at its German sites.
It’s not just Audi facing significant challenges – many car makers across the sector reported lower earnings last year. In November, Nissan said it wouldcut global production capacity by 20% and reduce its workforce by 9,000 after failing to meet financial targets.
Meanwhile, Audi’s parent company VW narrowly avoided closing three German plants after talks with unions in December.
Analysts have pointed to various factors, including the slower than expected transition to electric vehicles (EVs) and rising competition from relatively new Chinese manufacturerssuch as BYD.
More recently, tariffs introduced by Donald Trump have sparked a trade war that car makers anticipate will increase the cost of key materials. This also has led to concerns over an impending recession that would lead to reduced consumer demand.
Audi said the cuts would allow it to “future-proof” its two biggest manufacturing hubs in Ingolstadt and Neckarsulm. This includes securing a “future fund” for plant development, which it can use to set up new production platforms for future electric models. Neckarsulm will be expanded as “an AI and digitalisation centre” for the entire Audi Group.
Xavier Ros, Audi’s board member for human resources, said: “We are focusing our team set-up and consistently orienting it to the requirements of the future. We are doing this in a socially responsible targeted, step-by-step manner. To this end, we are now entering into a dialogue with our employees. The employee representatives are our close partners every step of the way. Our shared Audi path makes us strong and stable.”
Recent figures from UK car makers showed output continued to fall as they struggled with the shift to EVs.