Audi Seeks €2 Billion Annual Cost Reduction

Volkswagen AG's Audi unit aims to lower costs in such areas as purchasing and manufacturing to offset an expected upturn in spending on electric cars, self-driving technologies and new factories, sources tell Bloomberg News.

Audi CEO Rupert Stadler describes the cost-cutting effort to employees as a "fitness program." Bloomberg's sources say the aim is to protect the company's profit margin amid hefty spending dictated by regulatory and competitive demands.

Audi has said it intends to invest some €22 billion over the next five years, with about €15 billion going to technology and new products and €7 billion to add production capacity.

Stadler told reporters at the Paris auto show last week that sufficient cost reductions would enable the company to develop one or two additional derivatives of current models.