Audi Cuts Guidance as Tariffs and Restructuring Hit Earnings
'The situation continues to be very challenging,' Audi Chief Financial Officer Juergen Rittersberger said. 'In addition to intense competitive pressure, the drastically increased U.S. import tariffs and expenses for Audi restructuring measures have impacted financial performance in the first half of the year.'
The company earlier this year agreed a deal with worker representatives that will see up to 7,500 job cuts over the next few years in addition to measures that aim to increase productivity, speed and flexibility at its German sites. The company plans to save more than 1 billion euros ($1.17 billion) annually in the medium term.
On Monday, Audi said it now expects revenue this year at between 65 billion and 70 billion euros compared with an earlier forecast of 67.5 billion to 72.5 billion euros.
It expects the operating margin at 5%-7%, from 7%-9% previously, and net cash flow at between 2.5 billion and 3.5 billion euros, from 3 billion to 4 billion euros.
The EU and U.S. on Sunday struck a new deal that will see the EU pay a 15% tariff across the board for goods that enter the U.S., including vehicles.
'The effects of the tariff deal that was recently struck between the US and the EU are currently being assessed,' Audi said Monday.
It reported first-half profit after tax of 1.35 billion euros, down from 2.15 billion euros in the same period last year, reflecting the restructuring measures and compounded by cost pressures related to the U.S. tariff situation.
Revenue rose 5.3% to 32.57 billion euros.
The company said deliveries of Audi-branded cars fell 5.9% to 783,531 vehicles, led by a 10% decline in China as the region continues to suffer from intense competition.
Audi is focusing on rapidly expanding its portfolio of electric vehicles and strengthening its setup in China with market-specific models, production and local partners. It will launch several new models in the country in the second half.
Audi deliveries in North America fell 9%, mainly due to challenging economic conditions and model changeovers, while deliveries in Europe, excluding Germany, fell 4%. Germany saw deliveries rise 0.7%.
It delivered a 32% increase in Audi electric-car deliveries globally on year to 101,381 vehicles.
Write to Dominic Chopping at dominic.chopping@wsj.com
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Mint
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Puma's New Boss Takes Helm Trailing Adidas and a Recovering Nike
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Hindustan Times
5 hours ago
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The Hindu
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The twin strategy of Indian oil companies is posting record profits. This is, however, now under threat after U.S. President Donald Trump announced a 25% tariff on Indian goods plus an unspecified penalty for buying Russian oil and weapons. The 25% tariff has since been notified, but the penalty is yet to be specified. Coming within days of the European Union banning imports of refined products derived from Russian-origin crude, this presents a double whammy for Indian refiners. Sumit Ritolia, Lead Research Analyst (Refining & Modelling) at global real-time data and analytics provider Kpler, termed this as "a squeeze from both ends". EU sanctions — effective from January 2026 — may force Indian refiners to segment crude intake on one side, and on the other, the U.S. tariff threat raises the possibility of secondary sanctions that would directly hit the shipping, insurance, and financing lifelines underpinning India's Russian oil trade. "Together, these measures sharply curtail India's crude procurement flexibility, raise compliance risk, and introduce significant cost uncertainty," he said. Last fiscal, India spent over $137 billion on import of crude oil, which is refined into fuels like petrol and diesel. For refiners like Reliance Industries Ltd and Nayara Energy — who collectively account for a bulk (more than 50% in 2025) of the 1.7–2.0 million barrels per day (bpd) of Russian crude imports into India - the challenge is acute. While Nayara is backed by Russian oil giant Rosneft and was sanctioned by the EU last month, Reliance has been a big fuel exporter to Europe. As one of the world's largest diesel exporters — and with total refined product exports to Europe averaging around 200,000 bpd in 2024 and 185,000 bpd so far in 2025 — Reliance has extensively utilised discounted Russian crude to boost refining margins over the past two years, according to Kpler. 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Kpler data shows a notable decline in India's Russian crude imports in July (1.8 million bpd versus 2.1 million bpd in June), aligning with seasonal refinery maintenance and weaker monsoon-driven demand. However, the drop is more pronounced among state-run refiners, likely reflecting heightened compliance sensitivity amid mounting geopolitical risk. Private refiners, who account for over 50 per cent of Russian crude intake, have also begun reducing exposure, with fresh procurement diversification underway this week as concerns over US sanctions intensify. Mr. Ritolia said replacing Russian crude isn't plug-and-play. The Middle East is the logical fallback, but has constraints - contractual lock-in, pricing rigidity, and a mismatch in crude quality that affects product yield and refinery configuration. "The risk here is not just supply but profitability. Refiners will face higher feedstock costs, and in the case of complex units optimized for (Russian) Urals-like blends, even margins will be under pressure," he said. In the future course, Kpler believes India's complex private refiners — backed by robust trading arms and flexible configurations — are expected to pivot toward non-Russian barrels from the Middle East, West Africa, Latin America, or even the U.S., where economics permits. This shift, while operationally feasible, will be gradual and strategically aligned with evolving regulatory frameworks, contract structures, and margin dynamics. However, replacing Russian barrels in full is no easy feat — logistically daunting, economically painful, and geopolitically fraught. Supply substitution may be feasible on paper, but remains fraught in practice. "Financially, the implications are massive. Assuming a $5 per barrel discount lost across 1.8 million bpd, India could see its import bill swell by $9–11 billion annually. If global flat prices rise further due to reduced Russian availability, the cost could be higher," it said. This would increase fiscal strain, particularly if the government steps in to stabilize retail fuel prices. The cascading impact on inflation, currency, and monetary policy would be difficult to ignore.
