Audi's U.S. Meltdown: 6 Straight Quarters of Decline--But a Radical Pivot May Be Coming

Audi, the premium brand under Volkswagen (VWAGY), just posted its sixth consecutive quarterly sales drop in the U.S.a 19% decline in Q2 deliveries, with the top-selling Q5 SUV falling off a cliff at -29%. And yet, in a surprising move, Audi isn't raising prices in July. Instead, it's eating the margin pressure, likely to avoid losing even more ground in a market that's becoming increasingly brutal for German automakers.

The pain isn't just cyclicalit's structural. Audi, like Porsche, still doesn't build any cars in the U.S. Its models are imported from Europe and Mexico, leaving them vulnerable to tariffsa legacy of Trump-era trade policy that continues to bite. And with Chinese EV giants like BYD (BYDDF) undercutting prices in their home market and stealing market share, Audi now finds itself squeezed on both ends: fading in China and flailing in the U.S.

That might explain why Audi's CFO Jurgen Rittersberger is finally signaling a shift. In May, the company said it would pick a U.S. production site this year, and it's reportedly exploring synergies with VW's Scout brand and the existing Tennessee plant. If Audi pulls the trigger, it could be a long-overdue hedge against trade riskand possibly a lifeline in what's shaping up to be a make-or-break U.S. strategy.