Audi Cuts Outlook and Trims Neckarsulm Shifts as China and Middle East Bite

Audi lowered its full-year guidance on Monday and confirmed the elimination of a night shift at its Neckarsulm plant, in a stark signal that the pressures reshaping Germany's premium car industry are translating into hard capacity decisions.

The Volkswagen-owned marque now expects 2026 revenue of €58 billion to €63 billion, down from a prior floor of at least €63 billion, and cut its operating-margin target by a percentage point to between 5 and 7 per cent. Net cash flow guidance of €3 billion to €4 billion was maintained. The revision reflects a tougher market in China, where European premium brands are losing ground to domestic rivals, compounded by the continuing conflict in the Middle East.

Second-quarter figures underlined the strain. Operating profit fell 3 per cent to €533 million for a quarterly margin of 3.6 per cent, well below the revised full-year range, while revenue dropped 12.5 per cent. Chief financial officer Jürgen Rittersberger framed the response in structural terms, arguing that Audi must work with the Volkswagen group to realign its business model and pursue large-scale improvements to stay globally competitive.

The Neckarsulm decision brings that logic onto the factory floor. The south-west German site, which builds only combustion-engine cars following the end of A8 production, now runs at an annual capacity of around 225,000 vehicles, roughly 75,000 below earlier levels. It is one of four German plants within the Volkswagen group flagged as vulnerable to possible closure after 2030 as the parent contends with high domestic costs, Chinese competition and tariff headwinds.

The move lands amid a wider group reckoning. Volkswagen chief executive Oliver Blume has been weighing cuts of up to 100,000 jobs worldwide, a plan the powerful IG Metall union has vowed to resist.