Audi to slow spending in 2016 following Volkswagen emissions scandal

Audi slowing spending 2015

Audi says it will slow spending plans for 2016 and delay the construction of a new wind tunnel, after parenting company Volkswagen was hit earlier in the year by a scandal over rigged emissions tests.

Audi earned a higher operating profit than the VW group in the first nine months of 2015. The company said it would invest more than 3 billion euros ($3.3 billion) on plants and equipment in 2016.

Earlier in the year Audi announced investments of 17 billion euros over 2015-19, or an annual average of 3.4 billion euros.

“With the current investment program, we obviously want to enhance the brand’s strong position, but at the same time, we aim to achieve additional financial scope by means of further process and cost optimization,” Audi finance chief Axel Strotbek says.

The cut in spending at Audi arrives after VW, Europe’s biggest automotive group, cut 1 billion euros from its 2016 investment plan in November.

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Audi promised investors that future growth would not be hindered by its decision. Instead, the company plans to examine every investment individually to find cost cutting measures that make sense.

“The Board of Management has therefore decided to postpone the construction of a new wind tunnel for one year,” it said.

Audi is not commenting on its direct plan of action at this time.

Written by John Howard

John Howard

John Howard is the Business Editor at BusinessPundit.com. He is an avid watcher of markets, a wallflower of retail, and a fan of disruptive businesses that utilize technology and unique ideas to form brilliant new ways of doing business. He can be reached at Student Loan Ninja