Audi is set to present a new plan this May for the restarting of its growth momentum after increased spending on technology and stricter European emissions testing has seen it lag behind key rivals BMW and Mercedes-Benz, Bloomberg has reported.
Part of its plan includes costs savings by reducing its workforce by up to 15% over the next five years, which will be achieved through early retirements and not filling vacant positions, it reported Handelsblatt as saying. The automaker has a job guarantee which prevents forced layoffs until 2025.
The cost-cutting exercise is expected to account for two-thirds of a 15 million euro efficiency push, which the company is aiming to accomplish by 2022. “We’re going to work hard on our cost structures, but operationally we’re going to face a year of cleaning up,” said Audi CFO Alexander Seitz.
As part of this, the automaker is looking to trim its management ranks for savings and faster decision-making, according to Audi CEO Abraham Schot. He declined to state specific figures as talks with labour unions have yet to be finalised.
The report said cost increases faced by the German brand came from higher spending on new models such as the e-tron, and a an 800 million euro fine by German authorities for the long-running Dieselgate emissions scandal also cut into profits.
In product terms, the automaker is targeting the introduction of five fully-electric and seven plug-in hybrid models in the next two years to refresh its lineup. Also, set to broaden its lineup to 30 electrified cars by 2025, the automaker is also considering to switch one of its existing model lines to battery power.
Elsewhere, the brand is streamlining its lineup of combustion engine cars, with the future of models such as the TT and R8 uncertain. No decision has been made yet regarding successor models, according to development chief Hans-Joachim Rothenpieler.
The company will be investing 14 billion euros on new technology including autonomous driving, electric cars and digital services by end-2023, and said it will cooperate more closely with Volkswagen and Porsche to help lift returns. It also plans to put a greater focus on its largest market, China.
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