Audi AG, a subsidiary of the Volkswagen Group, announced on Monday a plan to eliminate 7,500 jobs in Germany by 2029. The decision comes as the automotive industry faces intensified competition from Chinese electric vehicle manufacturers.

Gernot Döllner, the CEO of Audi, stated in a press release that the initiative aims to 'strengthen Audi's competitiveness and future prospects.' The company attributed the move to an 'increasingly tough economic environment, competitive pressure, and political uncertainties' which present significant challenges for the firm.

In an effort to ensure that the job cuts are socially acceptable, as stipulated in an agreement with the works council, Audi has pledged to avoid layoffs.

The premium vehicle manufacturer currently employs 87,000 individuals, with approximately 55,000 based in Germany.

Audi has also revealed that its two largest facilities located in Ingolstadt and Neckarsulm, in southern Germany, will receive around €8 billion in investments towards 2029 to facilitate the transition to electric mobility.

The automotive sector is navigating a particularly challenging period in Europe, characterized by declining demand, competitiveness issues, and rising inflation.

In response to these challenges, several major industry players have announced cost-reduction plans.

For instance, Volkswagen disclosed in December its intention to cut more than 35,000 jobs by 2030. In 2024, Audi reported deliveries of over 164,000 fully electric vehicles, an 8% decrease compared to the previous year.

The Chinese market, which accounted for nearly 40% of Audi's global deliveries (650,000 of 1.67 million), saw a decline of 11%.