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(Sharecast News) - Audi reported a resilient financial performance for 2025 and signalled a recovery in profitability this year on Tuesday, as the German premium carmaker looked to offset the impact of tariffs and intensifying competition with cost savings and a renewed product push.
The Volkswagen-owned manufacturer generated revenue of 65.5bn in 2025, up from 64.5bn a year earlier, while operating profit fell to 3.4bn from 3.9bn, reflecting a roughly 14% decline.
Its operating margin narrowed to 5.1% from 6.0%, weighed down by a 1.2bn hit from US import tariffs as well as costs related to carbon dioxide compliance and strategic investments.
Net cash flow rose 11.4% to 3.4bn, supported by cost discipline and investment control, while profit after tax increased to 4.6bn.
Chief executive Gernot Dllner said "geopolitical uncertainties and global competitive pressure kept the automotive industry on its toes again last year," while finance chief Jrgen Rittersberger described the results as "resilient" but warned that "the framework conditions will not get any easier in 2026 either."
Tariff-related costs were expected to remain at similar levels this year, with Audi particularly exposed due to its lack of manufacturing capacity in the United States.
The company said a decision on a potential US production site could be taken in 2026, contingent on trade conditions.
For 2026, Audi said it expected revenue of between 63bn and 68bn and an operating margin of 6% to 8%, implying a rebound from 2025 levels.
The improvement was expected to be driven by further efficiency measures and a wave of new models, as the group targeted a gradual return to double-digit margins over the longer term.
Operationally, deliveries across the Audi-led 'Progressive' brand group - which includes Bentley, Lamborghini and Ducati - were broadly stable at 1.64 million vehicles, slightly below the prior year.
The Audi brand delivered 1.62 million cars.
Fully electric deliveries rose strongly, increasing 36% to 223,032 units, driven by demand for models such as the Q6 e-tron and A6 e-tron.
However, the group said it continued to face pressure in key markets, with deliveries in China declining and early sales of the China-specific E5 Sportback falling short of expectations.
Audi said it was seeking to regain momentum through an expanded model lineup and region-specific strategies.
New launches planned for 2026 included the Q9 flagship SUV, tailored to US demand, and the A2 e-tron entry-level electric vehicle in Europe, alongside further models for China developed with partners FAW and SAIC.
The company said it was also positioning its premium SUV range as one of the youngest in the US market in an effort to address previous gaps in its offering.
Alongside product investment, Audi said it was progressing with a restructuring programme aimed at improving efficiency.
The group was on track to eliminate 7,500 jobs in Germany by 2029 without compulsory redundancies, with around 65% of a planned 6,000 reductions by 2027 already implemented or agreed.
Performance across its luxury subsidiaries was mixed.
Lamborghini slightly increased deliveries and revenue, though profit declined, while Bentley and Ducati both reported lower volumes and weaker profitability amid challenging market conditions.
Audi also highlighted strategic initiatives beyond its core business, including its entry into Formula 1, which it said would enhance brand visibility and reinforce its focus on performance and innovation as it navigates a more competitive global automotive landscape.
At 1220 CET (1120 GMT), shares in Volkswagen were up 1.03% at 90.43.
Reporting by Josh White for Sharecast.com.