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Time of India
a day ago
- Automotive
- Time of India
Audi cuts forecast over US tariffs and restructuring costs
German automaker Volkswagen's premium brand Audi lowered its full-year financial guidance on Monday, citing the impact of higher U.S. import tariffs and ongoing restructuring costs. The Ingolstadt-based company now expects revenue of between 65 billion euros and 70 billion euros ($76 billion and $82 billion), down from its previous forecast of 67.5 billion euros to 72.5 billion euros. Audi also cut its operating margin forecast to 5 per cent to 7 per cent, compared to the earlier range of 7 per cent to 9 per cent. Audi said it is still assessing the implications of the trade deal reached between the United States and the European Union on Sunday. The agreement set a 15 per cent baseline U.S. tariff on imports from the EU, including cars, which had previously faced customs duties of 27.5 per cent. "Should the 15 per cent tariff stay in place long-term, it would still put Audi at a competitive disadvantage, because its key peers have a more pronounced U.S. production footprint," said Fabio Hoelscher, an analyst from Warburg Research. Audi is among the carmakers most exposed to U.S. tariffs as it has no manufacturing facilities in the United States. Although the deal provides clarity on the new tariff regime, enabling better operational and strategic planning, the 15 per cent rate still represents a structural shift from the 2.5 per cent rate before U.S. President Donald Trump took office, said Pal Skirta, equity analyst from Metzler Equities. That leaves German carmakers facing persistently higher U.S. tariffs on their exports and long-term competitiveness challenges, he said. The Volkswagen Group also cut its full-year guidance on Friday after taking a $1.5-billion tariff hit in the first half of 2025. Global automakers have booked billions of dollars of losses and some issued profit warnings due to U.S. import tariffs. The European industry is also facing stiffening competition from China, and domestic regulations aimed at speeding up the electric-vehicle transition.
TimesLIVE
a day ago
- Automotive
- TimesLIVE
Audi cuts forecast over US tariffs and restructuring costs
German carmaker Volkswagen's premium brand Audi lowered its full-year financial guidance on Monday, citing the impact of higher US import tariffs and ongoing restructuring costs. The Ingolstadt-based company expects revenue of between €65bn (R1,355,406,000,000) and €70bn (R1,459,560,200,000), down from its previous forecast of €67.5bn (R1,407,537,000,000) to €72.5bn (R1,511,687,350,000). Audi also cut its operating margin forecast to 5% to 7%, compared to the earlier range of 7% to 9%. Audi said it is assessing the implications of the trade deal reached between the US and the EU on Sunday. The agreement set a 15% baseline US tariff on imports from the EU, including cars, which had previously faced customs duties of 27.5%. "Should the 15% tariff stay in place long-term, it would put Audi at a competitive disadvantage because its key peers have a more pronounced US production footprint," said Fabio Hoelscher, an analyst from Warburg Research. Audi is among the carmakers most exposed to US tariffs as it has no manufacturing facilities in the US. Though the deal provides clarity on the new tariff regime, enabling better operational and strategic planning, the 15% rate represents a structural shift from the 2.5% rate before US President Donald Trump took office, said Pal Skirta, equity analyst from Metzler Equities. That leaves German carmakers facing persistently higher US tariffs on their exports and long-term competitiveness challenges, he said. The Volkswagen Group also cut its full-year guidance on Friday after taking a $1.5bn (R26,781,448,350) tariff hit in the first half of the year. Global carmakers have booked billions of losses and some issued profit warnings due to US import tariffs. The European industry is also facing stiffening competition from China and domestic regulations aimed at speeding up the electric-vehicle transition.
Reuters
4 days ago
- Automotive
- Reuters
VW's Traton slashes 2025 outlook as US uncertainty weighs on demand
July 25 (Reuters) - Volkswagen's truck unit Traton ( opens new tab slashed its full-year guidance late on Thursday, citing global uncertainty and weak U.S. demand due to trade tensions, sending its shares falling 3.2% by 1030 GMT on Friday. Traton now expects unit sales and revenue to decline by up to 10%, compared to its previous forecast between a 5% drop and 5% growth. It also cut its target for adjusted operating return on sales to 6-7% from 7.5–8.5%. The downgrade came despite an improvement in first-half orders, which rose 11% year-on-year to 139,600 vehicles, driven primarily by demand for replacement vehicles in Europe. "There is no evidence yet for a sustained turnaround in the European market," CFO Michael Jackstein said in a conference call. Traton said the economic situation in Europe remained weak, while North American truck buyers continued to show caution and demand in Brazil stayed subdued. "Visibility is low in most regions," said analyst Fabio Hoelscher from Warburg Research. Pal Skirta, equity analyst from Metzler Equities, said that Traton's recovery depended heavily on U.S. tariff policy. Without a trade agreement between the U.S. and its key partners, heavy-duty truck demand is unlikely to rebound, keeping pressure on capacity utilization and pricing at Traton's International Motors brand, he added. The U.S. market remains a key concern for German automakers, who are lobbying for a trade agreement to replace the 25% tariff on car and parts imports. The levy has dampened demand and competitiveness in the region. Hopes for progress have been buoyed by Japan's recent success in striking a similar deal with Washington, raising expectations for a breakthrough with Europe. European truck makers Daimler Truck and Volvo have been signalling sluggish demand in North America. However, Volvo surprised markets last week with stronger quarterly earnings, suggesting recovery signs in Europe. Traton, which also owns the Scania and MAN brands, posted a 33% year-on-year drop in its adjusted operating result to 1.4 billion euros ($1.64 billion) alongside a 6% decline in its half-year revenue to 21.9 billion euros. Volkswagen, which owns more than 87% of Traton's shares, also cut its full-year guidance on Friday after taking a $1.5 billion tariff hit in the first half of 2025. ($1 = 0.8512 euros)
