Audi Adjusts Strategy: Increasing Local Investment and Continuing Production of Fuel Vehicles​

On March 17th, local time, German automaker Audi announced a series of major strategic adjustments. In response to market changes and to enhance its competitiveness, Audi plans to invest 8 billion euros in German factories over the next five years and adjust its production plans for electric and fuel vehicles simultaneously.​

Audi's CEO, Gernot Döllner, stated at an employee meeting in Ingolstadt that this sum of money will mainly be used for technological innovation and production line upgrades to improve production efficiency and product quality. Some models originally produced in other countries are expected to be transferred to the Ingolstadt factory, and the factory will also add a new electric vehicle model to promote Audi's electrification transformation.​

Döllner emphasized, "Audi must become faster, more flexible, and more efficient. This investment will lay a solid foundation for our future development and ensure our competitiveness in the global market."​

Although Audi has been committed to the electrification transformation, its electric vehicle strategy is currently facing challenges. Market data shows that the growth in global demand for electric vehicles has not met expectations, prompting Audi to re-examine its product plan. According to the new plan, Audi will continue to produce some fuel vehicle models after 2030 and optimize the electronic architecture of traditional fuel vehicles to enhance their market competitiveness.​

This decision marks a significant shift in Audi's timeline for phasing out fuel vehicles. Previously, Audi had planned to accelerate the elimination of fuel vehicles and fully invest in electric vehicle production. However, facing market realities, Audi has to adopt a more flexible strategy to balance short-term market demand and long-term sustainable development goals.​

To support the strategic adjustment, Audi's management has reached an agreement with the company's labor union to cut approximately 7,500 jobs in Germany by 2029. Döllner said that this is a difficult but necessary decision to make the company competitive in the global market.​

"We must make necessary personnel adjustments to ensure that Audi can adapt to the rapidly changing market environment," Döllner said. "This is not only about cost control but also about enhancing our operational efficiency and innovation capabilities."​

Audi's strategic adjustment is not an isolated incident. As the global automotive market accelerates its transformation towards electrification and intelligence, the German automotive industry is facing huge challenges. Volkswagen Group previously announced plans to cut 35,000 jobs in Germany, Porsche plans to cut 1,900 jobs, and Mercedes - Benz also plans to cut thousands of jobs by 2027. In addition, automotive parts suppliers such as Bosch, ZF, and Continental are also considering reducing their workforce, with an estimated total of 70,000 job cuts.

These measures reflect the pressure faced by the German automotive industry in response to market changes. Although German automakers have deep technical accumulations in the traditional fuel vehicle field, they are facing fierce competition from competitors in China, the United States, and other countries in the areas of electric vehicles and intelligent connected vehicles.​

Audi's strategic adjustment shows that while automotive manufacturers pursue electrification transformation, they also need to maintain a keen insight into market demand and flexibly adjust their strategies. By increasing local investment, optimizing fuel vehicle products, and reasonably controlling costs, Audi hopes to maintain a leading position in future market competition.

However, with the continuous changes in the global automotive market, Audi and other German automakers still need to face many uncertainties. How to find a balance on the path of electrification, intelligence, and sustainable development will be a key challenge for them in the next few years.