Volkswagen cost cuts to hit Audi

Dieselgate coming home to roost as Audi and VW budgets slashed.

The current generation Audi R8 is likely the last of its kind, while plans for a huge research and development facility have reportedly been put on hold, as the Volkswagen Group looks to trim a further A$6 billion in costs by 2021.

It is currently two years into an A$8 billion restructure that has already delayed the arrival of the next generation of Volkswagen Golf.

Volkswagen is not only looking to recoup profits lost as it salted away tens of billions of dollars to battle the diesel scandal; it has committed itself to an electrified vehicle future and a target of 30 electric vehicles by 2025, which will require substantial investment to achieve.

Reports from Germany suggest that Audi will have to bear its part of the cost-cutting burden, with suggestions that the brand will have to abandon its bespoke MLB platform that underpins its A4 and A5 (amongst others models), in favour of a revised version of the VW Group’s MQB platform that doesn’t need unique transmissions and engines.

The R8’s 5.2-litre naturally aspirated V10 engine also places the car on the endangered list, as rivals like Ferrari turn to turbocharging to meet tightening emissions regulations.

The brand’s next generation of larger cars, including the A6 and A7, could be built atop Porsche’s MSB platform that currently underpins the Panamera saloon and be sold as rear-wheel-drive versions.

The standalone Audi R8 mid-engined platform, which also underpins the Lamborghini Huracan, could also be scrapped, with the VW-owned Lamborghini potentially able to use a downscaled version of its range-topping Aventador to serve as its next generation entry-level car.

The R8’s 5.2-litre naturally aspirated V10 engine also places the car on the endangered list, as rivals like Ferrari turn to turbocharging to meet tightening emissions regulations.

Another large cost reduction is the shelving – temporarily, according to Audi – of a huge new 75-building innovations campus at its Ingolstadt headquarters. Its decade-old World Endurance Championship and Le Mans 24 Hours racing programs are also under the spotlight, according to the report in German business magazine Der Speigel.

The majority of the cost savings will come from VW’s German operations, as the company and unions thrash out new agreements over workforce levels and even the length of the working week for particular divisions, including the research and development team.

Worker’s union officials actually hold almost half the places on the VW advisory board, and are fighting to prevent job losses amongst VW’s 200,000 staff. The final plan, called the ‘future pact’, is set to be presented in November.

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