German carmaker Volkswagen’s premium brand group Audi expects a recovery in its profit margin this year after trade tariffs dealt a €1.2bn blow in 2025, the company said on Tuesday.
The subsidiary, which includes the Lamborghini, Bentley and Ducati brands and Audi, expects an operating margin in the range of 6% to 8% in 2026, from 5.1% in 2025 and 6.0% in 2024.
“Geopolitical uncertainties and global competitive pressure kept the automotive industry on its toes again last year,” Audi CEO Gernot Doellner said in a statement.
Audi said cost discipline helped to partially offset costs in 2025. Still, operating profit slumped by 14% to €3.4bn.
Tariff costs, primarily impacting the Audi brand, are expected to persist at the current level in 2026.
Audi has no factories in the US and has been hit hard by US President Donald Trump’s tariffs on its cars imported from Mexico and Europe.
Doellner said a decision could come this year on whether Audi sets up its first plant in the US, in discussion with the broader Volkswagen Group, which also owns Porsche.
Volkswagen CEO Oliver Blume said last week such a move would only make sense in return for tariff relief.
Like its peers, Audi is battling challenges in its key markets, including strong competition in China.
“We will have to find different answers across regions,” Doellner said.
In China, where Audi deliveries slumped 5% in 2025, the brand is trying to win back customers with a “sister brand” — without the German carmaker’s famous four rings — launching the all-electric E5 Sportback, developed with state-owned Chinese carmaker SAIC.
Sales of the China-exclusive car fell short of expectations in the first two months of the year as Audi works to build brand recognition among a younger, tech-savvier customer base, finance chief Juergen Rittersberger said, adding changes to incentive programmes had hit demand generally in the Chinese market.
Reuters