Audi cuts its 2026 outlook again as nine-month profit falls

Audi has cut its financial forecast for 2026 after what it described as a significant deterioration in its business environment in the third quarter, especially in China. The Volkswagen subsidiary now expects revenue of €55 billion to €59 billion and an operating margin of 3% to 5%, according to its nine-month results release published on Friday 30 October in Ingolstadt.

The previous guidance was €58 billion to €63 billion in revenue and a margin of 5% to 7%, Reuters reported. It is the second downgrade this year: AFP noted that the earlier range was itself a cut from the 6% to 8% margin Audi forecast at the start of 2026.

The numbers

From January to September, the Audi Group generated revenue of €42.1 billion, down from €48.4 billion a year earlier, a fall of about 13%. Operating profit dropped to €1.15 billion from €1.56 billion, and the operating margin slipped to 2.7% from 3.2%. Profit after tax fell to €1.22 billion from €2.06 billion, a decline of about 41%. Net cash flow was the bright spot, rising to €2.44 billion from €2.11 billion, according to the company's figures.

The new forecast also sets net cash flow at €2.5 billion to €3.5 billion. Audi said the updated outlook does not include any restructuring expenses beyond those agreed in 2025. Based on the nine-month revenue, the new range implies fourth-quarter revenue of roughly €12.9 billion to €16.9 billion, our own calculation. Chief financial officer Jürgen Rittersberger told a media call he expects a significantly stronger fourth quarter, Reuters reported.

Where the cars went

The Brand Group Progressive, which includes Audi, Bentley, Lamborghini and Ducati, delivered 1,056,103 vehicles, compared with 1,191,141 a year earlier. Audi brand deliveries fell 11.4% worldwide. China, still the biggest single market, dropped 24.5% to 328,042 cars, and North America fell 17.3% to 128,749. Germany grew 1.8% to 152,011 and the rest of Europe grew 1.3% to 360,649.

Electric cars sent mixed signals. Global deliveries of fully electric Audis fell 12% to 143,748, with an 87.8% drop in North America, but Germany rose 39.1% and China 84.7%. Plug-in hybrid deliveries more than doubled, up 103%.

The sister brands were also under pressure. Bentley's operating margin fell to 3.5% from 6.1%, Ducati's to 4.4% from 6.0%, and Lamborghini's to 22.3% from 24.6%.

Why Audi lowered its sights

Audi listed several reasons in its release: a slump in China, above all for combustion-engine cars, tougher competition, growing export pressure from Chinese manufacturers in Europe, and the fast shift to electric cars in Europe. Higher energy costs tied to the situation in the Middle East and US tariffs added to the strain, as did the switch of its entry-level models from the A1 and Q2 to the fully electric A2 e-tron.

"Market and competitive conditions have become significantly more difficult in the third quarter," Rittersberger told journalists, according to AFP. "That all shows that we need to intensify measures and set clear priorities."

Chief executive Gernot Döllner said in the release: "The economic situation demands that we consistently renew Audi. To this end, we are setting clear priorities: reducing costs and increasing quality and productivity."

The plan

Audi says it is cutting costs and complexity, making its structures more efficient and putting money into software, artificial intelligence and driver assistance. Further measures to secure its German sites are to be worked out with the Group Works Council. AFP reported that Audi has already announced 7,500 job cuts and that the long-term future of its Neckarsulm plant is uncertain.

New models are meant to help. The large Q9 SUV goes on sale in early November and the electric A2 e-tron reaches European dealers in December. Audi says the A2 e-tron took 21 months less to develop than comparable predecessors. Production of the RS 5 plug-in hybrid planned for 2026 is already sold out, with European orders almost twice as high as expected.

Audi is also planning local production in the United States. "For us it is really a decisive financial step to go into the USA," Rittersberger said, according to AFP. He told Reuters that details of commitments linked to the planned plant in Georgia would be disclosed by the state, while talks with government representatives remain confidential.

What it means for European founders and investors

Audi's numbers add to a picture that has formed over the past week. Its parent Volkswagen reported an operating loss for the third quarter, and Mercedes-Benz also cut its guidance on weak demand in China. Germany's premium carmakers are losing volume and margin in the market that used to fund their transition.

For suppliers and mobility startups, that usually means tighter purchasing, longer sales cycles and harder price negotiations. Founders selling to carmakers should expect buyers to focus on tools that cut cost or development time. Audi itself points to faster development, software and AI as priorities, which leaves openings for startups that can prove savings quickly.

For investors, the split between a shrinking China business and a stable European one matters. European demand is holding up, and electric car sales in Germany are growing fast. At the same time, Chinese brands are increasing pressure on European prices, which keeps margins under strain across the industry and its supply chain.

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