Dieselgate To “China Speed” — Gernot Döllner’s Radical Plans To Remake Audi

MILAN — Audi is in the middle of a serious crisis, but the boss seems to be in a surprisingly good mood. “Do you need a little more air?” asks Gernot Döllner, since it is a bit cramped during the test drive. “Let’s open the roof!” He taps the dashboard display, and this low, shimmering silver sports car called the Concept C turns into a convertible in seconds.

From above, the spotlights in the Milan showroom now beam down on the car that is set to hit the market in about a year and a half: matte metal, almost no soft curves, sharp lines, even the door handles are rectangular.

“It is a very clear structure. That is what Audi will look like overall.” Döllner leans back in the seat with satisfaction. “This is the new design philosophy, but it is also a reflection of the company’s new structure.”

Normally, the unveiling of a new model like this would be held next week in Munich, at the IAA (International Automobile Exhibition). But too much is at stake for Audi. This is not just about launching a new car, which is why they brought the reveal forward by a week and chose Milan of all places: they cannot afford to stumble. Because this company may be the most complicated case in an already troubled German auto industry.

Audi was once known for its slogan “Vorsprung durch Technik” (Advancement through Technology), having perfected all-wheel drive, pioneered lightweight construction, and for a time even outsold Mercedes. Döllner’s predecessors had set a target of three million cars a year.

The reality in the first half of 2025: 783,000 cars sold, six percent fewer than the previous year. BMW and Mercedes have taken the lead. Last year, Audi shut down its plant in Brussels. Profit margins have shrunk to three percent. Making money with Audis has become almost impossible. At parent company Volkswagen, some senior managers are already describing Audi as a “restructuring case,” though that also serves as a convenient distraction from VW’s own problems.

Sum of its parts

“The greatest challenge is the sum of all the challenges,” Döllner told German weekly Die Zeit in an interview. High tariffs, new competitors, changing regulations, everyone has to deal with them.

But at Audi, the legacy of the scandal still lingers. Ten years ago, diesel fraud was exposed, and it quickly emerged that Audi was at the very heart of the deception. Then-CEO Rupert Stadler was convicted of fraud by omission eight years later; the verdict is not yet final. His two successors lacked authority. And the engineers spent more time fine-tuning diesel engines than preparing for the future.

“Of course, the cleanup drained a lot of energy, but it is now completely finished,” says Döllner, who has now led the company for two years. But that was not the only thing that cost Audi precious time. There was also the company’s own self-imposed bureaucracy.

Döllner says he has now eliminated 85% of all internal committees. Some 7,500 administrative posts are being cut, in agreement with the works council. He has also scrapped one level of hierarchy. “Four hundred fewer managers!” Döllner says with pride.

But that also means he now has 400 disappointed employees, which is bound to stir unrest. Especially since he has filled key positions with outside hires, such as the Chief Technology Officer and Chief Designer.

One should not confuse clarity with toughness.

In Ingolstadt, employees often talk about the brusque style of their not-so-new boss. Döllner himself insists: “One should not confuse clarity with toughness.”

He also enjoys powerful backing within the company. When rumors recently spread that he might soon be replaced, Döllner was propped up on two fronts. On one side stood works council chairman Jörg Schlagbauer, who told Automobilwoche magazine that Döllner was the right man; after years without direction, Audi “finally” had a boss with clear ideas again. On the other stood parent company VW, which extended his contract ahead of schedule.

“I am convinced,” Döllner says, “that organizational structure and product are linked.” If employees feel they can influence outcomes and their ideas are not lost in layers of hierarchy, then products will reach the market faster and in better shape.

Take the new car, the Concept C: from first sketch to roadworthy concept, less than a year. Total development time, 30 months. For Audi engineers, that is ambitious indeed, after a series of bungled premieres in recent years, mostly because the software failed.

So now some speak of “China speed,” meant to signal: we are as fast as our new rivals. Companies such as Zeekr, Nio, and Xpeng have launched very capable cars in recent years, and they are making life hard for Audi.

Chinese changes, tariff troubles

Thirty years ago, Audi was the only firm building luxury cars in China. Audi sedans became coveted rides for senior officials and Communist Party cadres. But that aura of status has turned into a burden. The four rings now strike young buyers as a symbol of their parents’ generation. Sales are dropping, down ten percent in China in the first half of the year. Even electric cars, which already account for half of all new sales in China, are struggling to move.

The reaction? Radical. Like its sister company VW, Audi has tied up with Chinese firms offering cutting-edge tech. To make sure customers notice, they have simply removed the rings on new models launching next year and put the name instead. AUDI will now appear on some Chinese cars.

Does that wound German engineering pride? Döllner insists it combines “the best of both worlds,” though he struggles to admit that the company itself is not leading globally in software or battery technology. They must think more regionally now.

The U.S. was also a lucrative market for Audi until recently, but tariffs there have risen sharply. Some of the costs can be passed on in higher prices, but not all. Hopefully the rules will become clearer in the coming weeks, Döllner says. Then they will decide whether to build a plant in the U.S. That would allow them to avoid tariffs, but it would require hundreds of millions in investment, despite austerity.

What drive systems will people choose tomorrow?

Such a line would most likely produce combustion engines, since Audi plans to launch a combustion-engine SUV called the Q9 in the U.S. next year. Overall, Döllner says, the American market is moving in a different direction from China. In recent months, sales of electric models there have fallen. “Not surprising, since the $7,500 government subsidy for electric cars has been scrapped, and instead combustion engines may now qualify for a $3,000 tax credit.”

What driving solutions will people choose tomorrow? This is the next uncertainty, not only in the U.S. but worldwide. Döllner’s predecessor Markus Duesmann had pledged to phase out combustion engines at Audi by 2033. Döllner has walked back that deadline. “Because we simply cannot foresee what the rules will be around the world,” he says.

Just recently they unveiled a series of new combustion-engine models as well as plug-in hybrids. They want to “remain flexible.” For now, that should help the figures. According to Döllner, only at the end of the decade will it be possible to earn as much from an electric car as from a gasoline or diesel.

A dangerous loop

German rivals are increasingly calling a delay of the European ban on combustion engines, slated for 2035. These targets are “simply no longer achievable in today’s world,” Mercedes CEO Ola Källenius, who also heads the European Automobile Manufacturers’ Association, recently wrote to EU Commission President Ursula von der Leyen, who plans to consult the industry on the matter shortly.

Döllner takes a different view. The U.S. is shaky, he says, but in Europe, a full switch to electric mobility is still realistic. “I want clarity and stability,” he says. “Partly because of something people often forget: decarbonization is about protecting our climate.”

So is it too difficult? “We can do it if e-mobility becomes more attractive, meaning electricity prices come down in the long term.” One sign that Audi is serious, Döllner points out, is this new car. It will be offered only as an electric model.