Audi chief ousted after German carmaker lags behind rivals

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Volkswagen is replacing the head of Audi after concerns that one of the German carmaker’s most profitable brands was lagging behind its competitors led to mounting tensions among executives within the division.

Audi said on Thursday that Gernot Döllner, who is currently VW’s head of strategy, will take over as chief executive of the Ingolstadt-based carmaker from Markus Duesmann, starting in September.

While Audi is still one of VW’s best-performing brands, VW executives in Wolfsburg have been concerned that the company had failed to keep pace with rivals BMW and Mercedes-Benz in software and e-mobility. Questions had been swirling over whether the company could still live up to its slogan Vorsprung durch Technik, meaning “progress through technology”, according to industry executives.

A particular point of contention had been the company’s software problems, which have already caused the delayed launch of its electric Q6 e-tron.

This soured the relationship between Duesmann and some of his top executives to the point that a coach was brought in to help facilitate discussions at meetings, according to German business publication Manager Magazine.

“He should maybe have spent more time to explain and get everyone on the same page,” one person close to Duesmann said about the rebellion against him. 

The decision to oust Duesmann, who will be retained by VW as a consultant, was made at the group’s supervisory board meeting on Thursday. Talks about a reshuffle at Audi had “been in the works for weeks”, one person said.

Wolfgang Porsche, chair of VW’s supervisory board, said he saw Döllner as a “versatile manager who has successfully mastered various projects in the Volkswagen group”.

The announcement is the second big appointment made by VW’s chief executive Oliver Blume since taking on the role last year. In May, there was a shake-up at the helm of VW’s software arm Cariad.

At a meeting with investors last week, Blume had noted that Audi’s current line-up of cars in China, VW’s most important market, was not competitive enough. 

While Audi sales in China have picked up, the majority of cars delivered are combustion engine models, with the Q4 e-tron being Audi’s only electric vehicle on sale in the country.

Lagging sales in China amid increasing competition from domestic Chinese brands such as BYD, is one of Blume’s biggest headaches as he tries to transform the world’s second-largest carmaker to fit the new era of electric vehicles.

Audi has also been falling behind BMW and Mercedes-Benz in the US, which both sell significantly more cars in the country.

While largely pleased with Duesmann for shifting Audi’s focus to electric vehicles, VW’s management did not seem to have confidence in him successfully overseeing the planned launch of 20 new models over the next three years, according to one person close to the ousted Audi chief.

VW’s management team saw Duesmann as a strategist “and we’re now at a phase where we could need someone more product focused,” the person said.