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Audi to Cut Back Spending by $2.5 Billion

Motor Trend logo Motor Trend 10/8/2014 Erick Ayapana

With continued research on advanced technology and sales growth, there’s no denying that Audi is far from stagnating. Its growth, however, hasn’t been cheap, and now the automaker is reportedly going on a financial “fitness program” that will result in spending cuts in a number of areas.

According to a report by Bloomberg ¸ the automaker is looking to reduce spending by about $2.5 billion a year. The cutback will allow continued spending on technology like electric vehicles, self-driving cars, and infotainment, while also leaving enough cash for new facilities, including a plant in Mexico that is slated to build the third-generation Q5 crossover starting in 2016. Audi R8 LMX© Provided by MotorTrend Audi R8 LMX

The news comes after Audi CEO Rupert Stadler sent out a company-wide letter in July detailing “a fitness program,” Bloomberg reports. That said, Audi will limit additional spending on purchasing and manufacturing, as well as development.

The company’s financial report reveals that Audi spent $2.7 billion on research and development in 2013. That number isn’t surprising considering the long list of innovations Audi has unveiled in recent years. In addition to intelligent LED lighting systems, the company continues to push hard on autonomous vehicle technology. Audi is also increasing its hybrid and all-electric offerings, including electrified versions of the next-generation 2015 Audi R8 supercar.

It’s unclear how the spending cutback will affect sales. Audi is on pace to sell 1.7 million vehicles this year thanks to new models like the A3, though it will be a challenge to overtake BMW, which has been the global luxury-car sales leader for the past nine years.

Source: Bloomberg, Audi

Audi R8 LMX© Provided by MotorTrend Audi R8 LMX
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