Audi sets up new business unit for ‘Transformation’

Yvonne Bettkober, who was most recently responsible for the global organisational development and transformation of Volkswagen AG and CARIAD, will take over the management of the division, according to Audi. The aim of CEO Gernot Döllner’s so-called ‘Audi Agenda’ is to restructure the entire company, reduce costs, increase productivity and innovation and thus improve competitiveness.

In order to underpin the focus of the ‘Audi Agenda’ on products and customer needs, the Board of Management had already introduced the series principle in Technical Development (known as the ‘cooperation model’ at Audi) at the turn of the year and also reorganised other areas in order to create flat hierarchies and fast decision-making processes. “The overarching goal is to accelerate decision-making and strengthen the company’s innovative power with a strong focus on customer needs,” Audi wrote.

Audi plans restructuring with billion-euro savings programme

To ensure a “successful and comprehensive corporate transformation,” Audi is bundling all key management functions for the transformation in the new ‘Transformation, Consulting and Organisation’ department from 1 March 2025. The new head, Yvonne Bettkober, has more than 20 years of international management experience, including at Volkswagen, Microsoft and Amazon Web Services. “With Yvonne Bettkober, we are gaining a manager who is as adept as she is experienced. With her background in the international technology and digital industry, she will add valuable perspectives that we need right now in the transformation of Audi,” says Audi CEO Döllner. Yvonne Bettkober herself added: “The current challenges call for quick action and short lines of decision-making. I look forward to contributing my experience to help unleash the potential and power of the Audi team.”

However, the changes that Döllner wants to implement at Audi go much deeper than the creation of the new transformation department announced by the company in the press release. More or less at the same time, the business newspaper Handelsblatt claims to have learnt details about the cost-cutting plans at Audi from company circles – involving billions of euros and considerable cuts for employees and suppliers, according to the German business newspaper.

Audi apparently wants to reduce material costs by up to eight billion euros by 2030 by an average (!) of 1.6 billion euros per year with five years remaining. And personnel costs are also to be reduced by one billion euros per year, according to the report: “To this end, jobs are to be massively cut, additional benefits cancelled and services outsourced.” Although the job security programme, which runs until 2029, prevents redundancies at German sites until then, redundancies for operational reasons would also be possible after that. Audi management will therefore have to rely on severance payments, voluntary redundancies or retirement until 2029.

It is not yet known how many jobs are involved – management and employees have agreed not to disclose details of the ongoing negotiations and have so far honoured this agreement. Up to 35,000 jobs will be cut at the parent company VW as part of the collective labour agreement shortly before Christmas, while Porsche will cut around 1,900 jobs.

The only thing that is clear is that Audi’s sales are declining, with 1.67 million units sold in 2024 or twelve per cent fewer than in 2023. 164,500 of these were electric cars (-7.8%), which corresponds to an e-car share of just under ten per cent. Audi is facing massive problems, particularly in the once important US and Chinese markets. In China, an attempt is now being made to sell electric cars without the four rings on the front with a subsidiary in order to reverse the trend. And since Audi – unlike Mercedes and BMW – does not have a US plant, the Ingolstadt-based company would be more affected by an escalation in the customs dispute. Although US production is being considered (together with Porsche, which is facing the same problems), building a plant would cost a lot of money and take a long time.

The cost-cutting programme should enable Audi to achieve higher returns again; the Group is talking about higher returns on sales by the end of the decade. In the first three quarters of 2024, Audi only achieved 2.5 per cent, which is considered too low in the industry, even for volume manufacturers. Audi will not present its business figures for the fourth quarter and full year 2024 until mid-March.

audi-mediacenter.com (new unit), handelsblatt.com (in German, savings plans)