INGOLSTADT, Germany, March 17 (Reuters) - German automaker Volkswagen's premium brand group Audi expects a recovery in its profit margin this year after tariffs dealt a 1.2-billion-euro blow in 2025,
Audi forecasts margin rebound in 2026 but battles on with tariffs
Audi's Financial Outlook and Strategic Responses to Tariffs
By Rachel More
INGOLSTADT, Germany, March 17 (Reuters) - German automaker Volkswagen's premium brand group Audi expects a recovery in its profit margin this year after trade tariffs dealt a 1.2 billion euro ($1.38 billion) blow in 2025, the company said on Tuesday.
Profit Margin Projections
The subsidiary, which includes the Lamborghini, Bentley and Ducati brands as well as Audi, expects an operating margin in the range of 6% to 8% in 2026, from 5.1% in 2025 and 6.0% in 2024.
Impact of Geopolitical Uncertainties
"Geopolitical uncertainties and global competitive pressure kept the automotive industry on its toes again last year," Audi CEO Gernot Doellner said in a statement.
Cost Discipline and Profit Decline
Audi said cost discipline helped to partially offset costs in 2025. Still, operating profit slumped by 14% to 3.4 billion euros.
Tariff costs, primarily impacting the Audi brand, are expected to persist at the current level in 2026.
Strategic Manufacturing Decisions
Possible U.S. Factory
Audi has no factories in the United States and has been hit hard by U.S. President Donald Trump's tariffs on its cars imported from Mexico and Europe.
Potential Expansion in the U.S.
Doellner said a decision could come this year on whether Audi sets up its first plant in the United States, in discussion with the broader Volkswagen Group, which also owns Porsche.
Volkswagen CEO Oliver Blume said last week that such a move would only make sense in return for tariff relief.
Market Challenges and Regional Strategies
Like its peers, Audi is battling challenges across its key markets, including strong competition in China.
"We will have to find different answers across regions," Doellner said.
China Market Performance
In China, where Audi deliveries slumped 5% in 2025, the brand is trying to win back customers with a 'sister brand' - without the German carmaker's famous four rings - launching the all-electric E5 Sportback, developed with state-owned Chinese carmaker SAIC.
Sales and Brand Recognition Efforts
Sales of the China-exclusive car fell short of expectations in the first two months of the year as Audi works to build brand recognition among a younger, tech-savvier customer base, finance chief Juergen Rittersberger said, adding that changes to incentive programmes had hit demand generally in the Chinese market.
($1 = 0.8688 euros)
(Reporting by Rachel MoreEditing by Madeline Chambers and Andrei Khalip)
