Dusseldorf. An important appointment is coming up for Audi boss Gernot Döllner this Friday. Before the weekend, the Supervisory Board of the Volkswagen Group will discuss the North American strategy of the world's second largest car company, according to information from Handelsblatt. At the center is a plan that is intended to make Audi more independent of US tariffs: the brand could build large SUVs in its own American factory in the early 2030s.
Accordingly, the plan is to build all large SUV models that are popular in the USA and are currently being produced in Bratislava, Slovakia, in a US factory. These would be the Q9 and Q7 models, which were relaunched this year. "The current generation of Q9 and Q7 are still being built in Bratislava. The facelifts of the respective models could then be manufactured in a new US factory from Audi in the early 2030s," says a person familiar with the processes. Audi did not want to comment on the plans.
Audi has been considering the idea of a new plant in the USA for years. The Handelsblatt reported on it several times. In contrast to its direct competitors BMW and Mercedes, Volkswagen's premium subsidiary does not have its own factory in the USA. Audi imports the cars for the US market from Europe and Mexico. A tariff of 15 and 25 percent applies to both regions. Since the tariffs came into force, Audi's US business has incurred billions in losses.
But a new factory would also be expensive. According to corporate estimates, a new building alone would cost three to four billion euros. And at Audi, as in the entire group, there is actually a crisis at the moment.
What makes things even more difficult for Döllner is that his main plant in Ingolstadt is in danger of running out of work. If the weak development continues, only around 325,000 vehicles could roll off the production line there this year, insiders report. Audi only built fewer vehicles in Ingolstadt during the peak phase of the corona pandemic in 2021.
Actually, the plant can easily produce 450,000 cars. Capacity utilization would therefore be around 72 percent. Suboptimal. Before a savings plan in 2019, the annual production capacity in Ingolstadt was as high as 600,000 vehicles. When asked, Audi did not want to comment on the specific production figures for the current year.
Audi is struggling with weak demand for electric models such as the A6 e-tron and the Q6 e-tron, both of which are manufactured in Ingolstadt. When it comes to the Q6 e-tron, the offer from competitors BMW and Mercedes is currently particularly noticeable, according to company circles. The recently launched electric SUVs GLC and iX3 are challenging Audi's customers.
Years of delays in development are now the downfall of the Q6 e-tron. The vehicle came onto the market in 2024 almost three years late. Both technically and visually, Audi's model looks outdated compared to the offerings from Mercedes and BMW. With a similar price level, customers are increasingly turning to the “fresher” models from Stuttgart and Munich.
For example, there are currently over 100,000 pre-orders for the BMW. For comparison: Since the market launch around two years ago, Audi has only sold around 129,000 Q6 e-trons worldwide, excluding China, where the Q6 e-tron is manufactured locally, as figures from data provider Marklines show.
From a business perspective, increasing capacity with a plant in the USA would therefore make no sense. Critics say this would only exacerbate Audi's general underutilization of production. "First of all, we have to make sure that we are properly utilizing our existing plants in Germany and Europe. Only when we can do that should we think about production in the USA," says a decision-maker.
Audi boss Döllner and production director Gerd Walker are in a dilemma here. Audi's growth strategy is closely linked to growing US sales. The ongoing import tariffs and the currently collapsing passenger car market in China are increasing the pressure on Audi to expand its US commitment.
From January to August, Audi sold just 94,000 vehicles in the USA, almost 18 percent less than a year earlier. The gap to BMW and Mercedes is gigantic. BMW registered around 253,000 cars in the same period, Mercedes has 224,000. Audi boss Gernot Döllner has been urging Wolfsburg for months to release investment funds for the construction of its own Audi factory in order not to lose touch with its direct competitors.
All options remain on the table for Audi’s US business. It is possible to build your own new factory, produce in the Scout factory or expand the VW factory in Chattanooga. The target is an annual production capacity of around 150,000 units. However, the prerequisite is that the US government continues to make concessions regarding tariffs in the event of a multi-billion dollar investment by the Volkswagen Group in the USA, say people with knowledge of the events.
However, an Audi factory in the USA could spell the end of the second German Audi factory in Neckarsulm. For the plant, where Audi currently only produces the combustion engines A5, A6 and A7, there is currently only a model allocation until 2034.
As part of the tightened savings plans, Volkswagen boss Oliver Blume has given the Audi brand group Progressive a savings target that, if it could only be achieved through job cuts, would involve cutting around 10,000 jobs.
As part of the savings plan, Audi is free to achieve the “cost equivalent” through other means, such as selling shares or making lower investments. However, given the size of the savings target and the potential billions in investments in the USA at the same time, the scope for action to maintain the Neckarsulm plant is likely to be drastically reduced.
The situation in Ingolstadt is not yet that dramatic. But even in the main work, only the principle of hope still applies. And that is closely linked to a new model that is now being manufactured there: the A2 e-tron. With the compact electric car, Audi wants to build on the legendary original combustion engine model from 1999, which set technical standards at the time with an aluminum body and extremely low air resistance value. The A2 e-tron could attract more customers with a base price of less than 40,000 euros. The Audi entry-level model could then offset at least part of the falling Q6-e-tron demand.
