Another global luxury automaker is cutting jobs after struggling to keep pace as the industry shifts to electric vehicles (EVs). With EVs gaining market share in most major regions, some are starting to get left behind.
Audi is the latest luxury brand to announce job cuts
Last month, it was Aston Martin. The British sports car maker announced plans to cut 5% of its workforce after its fourth-quarter losses (before tax) surged 400%. Now, another luxury auto brand is planning to cut jobs.
Volkswagen’s Audi plans to cut up to 7,500 jobs by 2029. In a statement on Monday, the company said “Through a temporary reduction and a new structure of the profit share program, the Audi workforce is giving a major contribution to making the four rings weatherproof and future-proof again.”
The jobs are in “indirect areas” and will save Audi around €1 billion ($1.1 billion) that the company will use to drive growth.
Audi plans to invest around €8 billion ($8..7 billion) at its German plants. In Ingolstadt, Audi will introduce its new entry level EV while the upcoming Q3 will be produced in Hungary and Győr.” It also said it’s considering another model in Neckarsuml.
As part of its new agreement with the works council, Audi is extending the job protection plan until the end of 2033.
Audi’s deliveries fell nearly 12% last year to around 1.7 million units. The company blamed “the challenging economic conditions, an intensely competitive market, and limited availability of parts.”
Like most global OEMs, Audi and Aston Martin are getting squeezed out of the market after struggling to keep up with EV leaders like BYD, Tesla, XPeng, NIO, and others.
Luxury automakers have been hit especially hard with cheaper options hitting the market with more advanced tech and features. Last month, sources told Bloomberg that Mercedes-Benz was planning to cut up to 15% of its workforce in China.
Other global auto leaders, including Ford (in Europe), Nissan, Stellantis, and Volkswagen, all announced plans to cut jobs with more competition and rising losses in China.
Audi partnered with China’s SAIC last year to jointly develop EVs in China as it looks to turn things around. The vehicles will begin roling out this year on a new platform and ‘AUDI’ branding.
Electrek’s Take
Like most global automakers, Audi, Aston Martin, Mercedes (and most luxury automakers really) are struggling to keep up with China’s EV surge. Luxury automakers like Aston Martin, BMW, Mercedes-Benz, and Porsche have been hit especially hard, with more advanced, tech-loaded EVs coming out of China, many times at a much lower price.
Although BYD is best known for its cheap EVs, like the $10,000 Seagull, it’s quickly expanding with luxury sedans, SUVs, and electric sports cars hitting the market.
And BYD is not the only one. Xiaomi, which launched its first EV, the SU7, last March, secured nearly 250,000 orders in just nine months. Last month, it launched the flagship “Ultra” model, starting at just 529,900 yuan ($73,000). XPeng, NIO, Li Auto, and others are all gaining market share in China’s luxury market.
With China now flooded with domestic models, these companies are expanding into new overseas markets, including Europe, Southeast Asia, and Central and South America, to drive growth.
Can global automakers keep up? Or will China continue dominating the market over the next few years as the industry shifts to EVs? Drop us a comment below and let us know your thoughts.
FTC: We use income earning auto affiliate links. More.
