Audi Drops Plans for Its Own U.S. Manufacturing Plant, CEO Clashes With Supervisory Board

[Source: Manager Magazin; New Mobility News]

When the U.S. imposed tariffs on imported automobiles, we knew that Audi would be in the crosshairs. With only the Q5 being manufactured in North America (Mexico), Audi would bear the full brunt of increased tariffs. To combat this, there was talk about Audi building their own manufacturing plant in the U.S. like their rivals BMW and Mercedes-Benz. However, German publication Manager Magazin, first reported and New Mobility News then shared the news that this plan is now off the table.

To say that Audi has a lot going on right now would be an understatement. They are trying to right the ship with a whole new design philosophy. This includes the launch of a massive new product offensive. They are also entering the challenging and expensive world of Formula 1. On top of that, they need to navigate the changing regulations around emissions, and the decline of EV adoption rates. Add to that the stress of U.S. tariffs and there is little wonder that things can be a little tense at Audi right now. Reports indicate the Audi CEO Gernot Döllner, is clashing with the supervisory board.

Financial Plan

There is a lot to unpack here. Döllner was reportedly tasked with cutting 5 billion euros from the budget over the next 5 years. At a recent meeting with Audi’s supervisory board Döllner presented his 5-year plan but it was 2 billion euros short of the savings target set by Volkswagen Group CFO Arno Antlitz. The board is putting pressure on Döllner to meet this target.

One way for Döllner to do this is to scrap the idea of building a dedicated Audi plant in the U.S. However, that doesn’t mean that Audi is scraping their plans to build vehicles here. As we reported last month, Audi may build an SUV based on the Volkswagen Group-backed Scout SUV platform. Scout is building a new plant in Blythewood, South Carolina. The new Audi, based on the Scout, will be built in the same plant.

Chattanooga Plant

In addition, Audi is reportedly considering producing the MEB-based Q4 e-tron SUV at VW’s Chattanooga, Tennessee plant. The Q4 e-tron is currently built in the Zwickau plant in Germany. The Cupra Born and VW ID.3 are also built there. The Cupra and VW were going to be transferred to the Wolfsburg plant. That would have left the Q4 e-tron alone in Zwickau. However, the decision has recently been made to keep the Cupra and VW in Zwickau. That gives Audi the freedom to move Q4 e-tron production to Chattanooga while keeping Zwickau running.

There are a lot of moving pieces at Audi right now. The pressure is on for Döllner to get things sorted. But even within the company he is facing challenges. According to Manager Magazin, there was a recent anonymous survey sent to the 3,000 employees at Audi asking how they felt about the company improvements and reorganization process. Döllner at Audi were rated on a scale from 1 (‘unsatisfactory’) to 6 (‘fully satisfactory’). The scores ranged from a high of 2.6 to a low of 1.9. Of course, we should probably take this with a grain of salt, because CEOs often get low marks from employees.

The real proof will come in the next couple of years, when we see where Audi stands. It is a challenging landscape right now, but there are some promising products in the pipeline which can make all the difference.