Audi Launches New Cost-Cutting Drive

Audi AG is starting a new "fitness program" to reduce fixed costs, improve efficiencies and make itself more agile, Reuters reports.

The news service says CEO Rupert Stadler will explain in a letter to employees today that the plan will help the company deal with market volatility, rising technology costs and other factors that have eroded profit margins.

Reuters notes that Audi's margin dropped to 10.1% last year from 11% in 2012.

Stadler s letter says the Audi plan also will include unspecified steps to lower costs by better integrating the company's vehicle development, procurement, production and sales activities. A spokesman tells Reuters the efficiency drive is not expected to affect Audi's previously announced plan to invest €22 billion through 2018 on product, facilities and manufacturing system updates.

Audi's cost-cutting move comes as parent Volkswagen Group begins its own initiative to reduce annual costs for the VW brand €5 billion by 2017.