Volkswagen AG’s Audi luxury-car unit was raided by German prosecutors as investigations into the manipulation of diesel engines continue to weigh on the manufacturing group.
Prosecutors raided offices on Wednesday at the company’s main sites in Ingolstadt and Neckarsulm, Audi spokesman Juergen de Graeve told reporters before the carmaker held its annual earnings press conference. The action started at 7am and is still ongoing, he said, declining to comment on the reason for the move. Audi is fully cooperating with authorities to clarify the allegations, de Graeve said.
The raids mark a fresh blow to Volkswagen’s efforts to overcome the diesel-engine manipulation scandal that erupted in September 2015 and shaved 1.63 billion euros (Dh6.3 billion) from earnings at Audi, the group’s largest earnings contributor last year. Protecting profit at Audi is key for Volkswagen, the world’s bestselling automaker, as it spends money on fixing as many as 11 million rigged diesel cars while maintaining financial firepower to develop electric models and new digital services.
Expenses for the diesel scandal pushed Audi’s operating profit margin down to 5.1 per cent of revenue from 8.3 per cent in the previous year, below a target range of 8 per cent to 10 per cent.
The prosecutors’ probe adds to Audi’s woes as it has been losing ground to Daimler AG’s Mercedes-Benz, which replaced BMW AG’s namesake brand as the world’s bestselling premium-car maker last year. Global sales declined 1.1 per cent in February to 125,100 cars as a dispute with dealers in its largest market China escalated. Audi’s deliveries in China fell 5.8 per cent to 32,155 cars last month.
