A lot of the buzz this week has been over the unusual appearance of Audi CEO Gernot Döllner at a rally for Republican candidates in Georgia last week hosted by President Trump. German politicians, citizens, and employees have expressed disgust. There are petitions calling for his removal. As more information comes out, though, I do think it’s getting harder to blame the company.
The Morning Dump will take the contrarian view today, which is that this might be bad for democratic norms, but it’s maybe a great outcome for Audi and its parent company, in that they might have gotten enough tariff relief and incentives to make the plant essentially not cost anything. I think you gotta take that deal.
Audi has to do something as it can’t rely on China. No one can rely on China. The market there is entering its “harshest winter.” Exports are helping, of course, but there are only so many exports. Who is doing okay in this environment? Ford is turning it around, slowly, and Hyundai is absolutely crushing.
The Art Of The Deal
With one very notable exception (Elon Musk), automotive CEOs generally don’t go to campaign events as representatives of their own company. Many corporations, including Volkswagen, have specific rules against this kind of behavior, and in a well-functioning democracy you don’t necessarily want to have a political leader blackmailing companies into appearing like they’re supporting candidates.
The fact that Audi’s CEO appeared on stage at a rally in Georgia upset and surprised many people in Germany, and it’s turned into a public relations disaster for the company over there. Here? I don’t think anyone is going to even think twice about it before leasing a Q5 or whatever. Yesterday, we learned there was likely some sort of quid pro quo involved.
Which, yeah, duh.
Döllner got on that rally stage, said what he needed to say, and left so quickly I’m surprised he didn’t leave a smoke outline of himself like Wile E. Coyote. It had the feeling of a hostage video. It’s not going over well in Germany, where more than 100,000 people have signed a petition calling for Döllner’s removal.
Perhaps, though, Audi got the better of the deal? There’s a lot more detail coming out today, and it makes what happened make a little more sense. From Manager Magazin (Google Translated):
Döllner presented a newly concluded deal: Audi could finally finance the plant in the USA that he and his board had been planning for a long time. Under the new conditions they had negotiated with US politicians, the investment would finally pay off. He could not give exact details, as the agreement had not yet been signed.
There were “no facts or figures,” someone in the group said. But, according to those involved, the promise made by the travelers to America was enormous: the company was supposed to indirectly recoup its entire investment. A small portion through subsidies, the rest through tariff reductions. In other words: a gift!
Unlike BMW and Mercedes, Audi has no production in the United States. According to former Audi of America President Johan de Nysschen in an interview with Automotive News, the company was close to building a plant there, but decided on Mexico at the last minute. The company could have co-located with Volkswagen in Tennessee, if it weren’t for pride:
“Ingolstadt does not like to be dictated to by Wolfsburg, and they want to be masters of their own destiny,” de Nysschen said. Co-locating with Volkswagen carried the risk of reinforcing consumer stigmas. “So many people who are ignorant say, ‘Oh, Audi is just a luxury Volkswagen.’ It’s not true, but if they are built in the same plants, that reinforces that perception.”
Sharing the plant would have produced economies of scale, leveraged suppliers and enhanced utilization rates, which Chattanooga desperately needs. Currently, the plant runs well below capacity, producing only the VW Atlas and Atlas Cross Sport.
“You are trapped in this sort of vicious cycle,” de Nysschen said. “You can’t build volume because you’re too expensive, and because you don’t have volume, you are too expensive.”
Audi is currently building cars in Europe, which have tariffs, and Mexico, where Audi faces a double-whammy of tariffs and extra charges because its plant there isn’t complaint with the US-Mexico-Canada Agreement. The company is losing money, China (more on that later) is a bad bet, and something has to change. For years, Audi has been looking to bring a plant to the United States, and the tariffs have only reinforced this need.
Manager Magazin has a little more on how this deal allegedly came together:
That the supposed gift would indeed come at a price was apparently already suspected by some that Friday afternoon. The course of the call with the most powerful people in the company, greatly shortened and simplified, can probably be imagined roughly as follows: Audi CEO Gernot Döllner announced that he would thank US President Donald Trump (80) for his support. Following this, according to those involved, questions arose – and, only gradually, answers. Döllner would meet Trump. No, not at the White House. At a campaign event. He would be in the audience. And on stage.
Some in the group were visibly shaken. It could be interpreted that Trump was giving Audi an investment gift before the US midterm elections on November 3rd – and using the creation of 4,500 jobs to drum up support for his policies.
I mean, probably? But why should Audi’s CEO really care? He’s not an American citizen, and there’s already an American citizen auto industry CEO appearing at Trump rallies and threatening legislators, so a quick thank you doesn’t seem that bad by comparison.
There is some sort of strange circular logic to this from the US side. Tariffs were supposed to encourage manufacturing here, but the only way to do that is to offset those tariffs from other foreign manufacturing? What was the point, then?
Either way, what was actually agreed to and what was determined is completely up in the air at this moment, as Handlesblatt reports:
According to insiders, only vague declarations of intent exist. The agreement with Trump is said to be particularly uncertain. Allegedly, the only agreement reached with the US government is that concrete steps regarding potential tariff reductions after the midterm elections could be taken in mid- or late November.
There appears to be nothing more than a “Memorandum of Understanding.” “With that, we effectively have nothing in our hands. And nobody knows what will happen to this ‘nothing’ if the Republicans lose in Georgia,” says a person familiar with the matter.
Oh, right, that’s why you don’t do this.
Norms, like history, are essentially a lie we all agree to believe. It’s not good for the average citizen if the addition or reduction of jobs is all just a result of political theater, so that only the states run by members of the Natural Law Party get a new Citroën plant. And if you’re a company, does throwing in with Legal Marijuana Now Party of Nebraska mean risking losing out big if they happen to not win the election? That also seems less than ideal.
China’s Car Association Sees A 22% Sales Drop This Year, Followed By A 2% Rebound Next Year
China was once a major profit center for traditional OEMs, before the local industry rode huge government investment to essentially leapfrog the people who taught them how to make cars. Now profits are hard to come by as there are still too many companies building cars and not enough people buying them.
This year has been rough, next year is, according to this Automotive News report, not much better:
Passenger vehicle sales in China will drop 22 percent to 18.5 million in 2026, marking the steepest-ever downturn for the world’s biggest auto market and breaking its five-year growth streak, the China Passenger Car Association forecast on Oct. 26.
The group expects only a modest 2 percent rebound in 2027.
Cui Dongshu, secretary-general of the trade group, attributed the plunge to multiple “short-term” factors, including tightened government subsidies, a new tax on electrified vehicles, higher oil prices and increased vehicle production costs.
Yikes.
Companies like BYD and Geely have seen better margins abroad, and especially in places like Europe. Still, there’s not enough of that to go around given that governments that have domestic automotive production are extremely wary. Here’s more from Nikkei Asia:
Geely’s net profit fell short of the market expectations of 5.19 billion yuan, sending its Hong Kong-listed shares down 4% on Thursday.
“Management is not very content with the quarterly results,” Vice Chair Gui Shengyue said. “Over the past three months, we’ve encountered challenges unlike anything we’ve seen before … with every model in our line-up coming under assault from similar products offered by competitors.”
“China’s auto industry is currently going through the harshest winter in history,” he added.
What can one even do in this situation? Is anyone able to survive it?
Hyundai’s Shift To The US And India Is Paying Off
Hyundai seems to be the automaker that’s playing the game at the highest level right now, balancing EV powertrains and hybrids, as well as production and sales across the globe. The company’s operating profit rose to about $2 billion in Q3 of this year. How did the company do it?
The performance was underpinned by Hyundai’s best-ever third quarter in the US, where rising gas prices strengthened sales of hybrid models including the Santa Fe sport utility vehicle and the Sonata sedan. Retail sales in India, a key future growth market, rose 9.5% in the period.
It’s not all open field ahead of the automaker, as sales were down in China, Europe, and South Korea. There are also tariff costs, which are weighing on everyone.
Ford Profits Up As Well
Ford is an automaker that isn’t that reliant on China, which is not a bad place to be. The company also sells hybrids, which people want. The biggest strength Ford has is F-150 sales, and those were imperiled by a fire at its aluminum plant (and the inability to import foreign automotive grade aluminum due to tariffs).
It sounds like we’re maybe clear of that now, and the company’s profits ticked up a bit to $2.7 billion last quarter, as Reuters reports:
Ford CFO Sherry House told reporters on Wednesday that “Novelis’ operational recovery is largely behind us.”
The automaker is turning F-150 trucks at a much higher rate than normal, Ford CEO Jim Farley told analysts. It is aiming to keep about a 55- to 60-day supply of vehicles, versus the typical 80 to 100.
“It’s really allowed us to build that disciplined full-size truck business, while we watch our competitors play a very different game,” Farley said.
Ford will have more competitors in the truck space soon, including Hyundai.
What I’m Listening To While Writing TMD
As far as unconventional, vampire-adjacent songs for Halloween go, you could do worse than “On Your Side” by The Last Dinner Party.
The Big Question
What’s the best deal you’ve ever made on a car, service, or a car part? My parents once traded my mostly functional manual Ford Escort to someone who painted our house. Was that a good deal?
Top photo: Audi/NBC Universal
Cheesecake Factory?
Just Gold, everywhere!
“We are making hundreds of billions of dollars thanks to big oil?”
“And winning bigly, bigly I say”
WTF?
A noble spirit embiggens the smallest man.
“Nothing bad can happen.
It can only good happen.”
My 5 year old dog speaks English better…
You all better vote.
Truck sales are up. Even with these gas prices. That’s the lead.
“American consumers sprint to shoot themselves in the dick over and over again with alarming consistency”
Pickup truck.owners are like the earth. They endure.
TBQ:
My first car was a 1990 Nissan 240sx Coupe (a hint of who I am for those aware of my former Jalopnik username) that I bought for $1600 when I was 18. I had only been driving the car for 6 months to the day when it was totaled by an inattentive driver who thankfully admitted fault. In those six months, I had welded the diff, taken it drifting on a skidpad, mountain driving/canyon racing at midnight, lost my virginity in it, I taught every single one of my friends how to drive stick, and more.
Well, sadly the car was totaled after the accident. I bought it back from insurance for pennies on the dollar (this was 2010, S13’s were cheaaaaaap) and I ended up parting out the entire car for around $5000 which in turn helped increase my presence in the local SoCal drifting scene and helped me earn a ton of new car friends/connections along the way.
So not only did I get to experience the wonders of life through my car, I made money from it lol.
Best deal of my life.
TBQ: My wife’s $25 raffle ticket won a Jeep. That’s a good deal.
When it was totaled, the insurance company paid us thousands. That’s a great deal!
Running car companies by decisions base on only quarterly profits, sucking up (off) politicians and making too many cars too expensive for too many people, might be a bit risky.
TBQ: in 2002 I bought a two-owner, somewhat rusty but complete, 75k original mile ’69 Porsche 912 with all the documentation including the original bill of sale and window sticker for $1000.
Since then I put roughly $9k into restoring it and have paid registration and insurance for all those years. It is currently worth between $50-75k.
Imagine going back in time to tell 80s/90s Hyundai owners that in 2026, they’ll be a global Juggernaut with the most diverse lineup.
Seriously. Hyundai/Kia/Genesis have been on an absolutely Meteoric rise since 2010.
Dude back then were junkyard Hondas with hamsters under the hood. Unreal.
Friend in the Navy then bought an 86 or 87 Excel. I don’t have to describe it.
My (ex) wife bought an 03 Tiburon and was a world of difference. Like night/day.
As a current Hyundai owner, I often think to myself, “Man, 10 years ago, I couldn’t imagine owning a Hyundai!”
I had the Genesis Coupe in 2010. The moment that car got announced, I just went “yep, that’ll do.” and it did! For 8 years as my daily.
Audi *is* just luxury Volkswagen.
Also, anyone who is like “I don’t see what’s wrong” – you are why everyone has to watch cringe HR trainings every year. Quid pro quo is a low energy tool for losers. Sad!
What’s an HR training video?
It’s where they teach you how to legally extract Resources from Humans. Not ethically, just legally.
Oh. So kinda like Repomen. Cool.
Think more like The Matrix.
Even better! Neo can really limbo
No one can out-limbo Hermes.
Soylent Green comes to mind.
My work changed the name of human resources to Human Capital a few years ago… and then it changed it back to human resources. I kept asking them, out loud, “is not “human capital” just another word for what is in a slave ship?” They did not like that at all.
Video’s or web based training on diverse subjects such as:
How to use a fire extinguisher
Preventing Harrassment
Active Shooter Preparedness
PPE (Personal Protective Equipment)
Workplace Violence
Code of Conduct
Responsible use of Company Computing Devices
Good documentation practices
EHS Safety Practices
Hearing Conservation
Lockout/Tagout procedures
I work in a medical supply chain so I also get things related to HIPPA, Pharmacovigilance, GHS classification and rating of chemicals.
I probably watch and take a test on 50 of these things every year.
I’ll pour one out in your honor. That’s a lot
Haha, I’ve taken all of those every year too.
Geez, that’s a lot!! I only have to complete about 10 each year. They use the same videos over and over and over, which makes the tests a breeze.
When in graduate school I and the entire rest of the department was forced to attend a Saturday sexual harassment seminar because of ONE notorious jerk. And when I say notorious mean N O T O R I O U S. He was as narcissist as they come and thought nothing of offering grading leniency for *favors* from students he found attractive. Which is funny since graduate students really have little authority to use such leniency. Which I suppose is why his upset customers (yes plural) sued the university thus triggering the stupid seminar.
He even dated multiple graduate students and confided in the department secretary (herself was a notorious gossip) that he fantasized about simultaneously impregnating his girlfriends so they’d have to pass each other in the hall, baby bumps on display for each other to see in shame.
He was seriously messed up.
Outside the seminar the department chair was standing by the door as we all shuffled into the room fuming with anger and shooting daggers at us all even though WE had done no wrong. Of course the jerk didn’t even show up. And no, he was not kicked out of the program. He continued on, graduated and got a cush industry job pretty much right away. He’s still out there..somewhere.
I had a custom front winch bumper made for my Wrangler and when I got it the front receiver hitch was off center by the the width of the hitch. The shop felt so bad they gave me my money back, gave me a new bumper for free and let me keep the old one that I sold. Cannot beat that, I made a couple hundred bucks and got a free winch bumper.
Around 1996, someone gave me a 1985 Thunderbird Elan with the 5.0 V8 because the transmission wouldn’t shift. When I checked under the hood, the problem was just a disconnected throttle valve linkage that kept it from shifting until the engine was screaming at high RPMs. I fixed it with a simple cotter pin and offered to return the car, but they told me to keep it. Paired with that overdrive transmission, it got surprisingly great mileage. Inside, it had red leather power seats, a center console that actually moved along with the driver’s seat, and a digital dash that looked straight out of an ’80s arcade racing game. It ended up being a fantastic road trip car.
TBQ: I bought my first car, a ’90 GMC S15 Jimmy for $1200 in 2000. It did have 183K on the clock but other than a dent and needing a comprehensive tune up and tires had nothing really wrong with it. I drove it for awhile and got bored with how slow and inefficient (crying realizing that gas was like $1.05/gallon then) but even accounting for inflation that seems like an awfully good deal to me.
I replaced it with an ’89 Mazda 626 Turbo in 2001 with 128K on the clock for $2800, which seems like kind of a deal for a clean 12 year old sport sedan with lots of life left on it-drove with a buddy from SW Montana all the way to Yellowknife and back in that car without a single issue-besides realizing it was a little low on Mobil1 in Yellowknife and trying to track down a quart of it without burning up all my gas money.
Wait, I keep getting told that giving freebies by the government to private enterprise is socialism/communism, and that the government needs to stop picking winners.
Did I miss the script change here? Because this has been the message being told of other government meddling or propping up with “unfair” terms.
Or is it only “unfair” when someone else does it?
I’ve given up on expecting any sort of actual idealogical coherency. At this point I think anything goes unless the dems do it, then it’s dirty pinko communism.
I was listening to an interview with a 1st generation Chinese Canadian who’d lived in both the US and China for years and worked in tech, he was commenting that the irony of all the anti-China communism handwaving is that the current administration is basically trying to operate the same way as the Xi government. And that the Chinese really are only socialist in name at this point, more like centrally planned authoritarian capitalism.
Conservatism is just socialism for the wealthy
Don’t forget to toss some morsels to the farmers, not enough for family farms to let them sleep well at night, but enough that they beg you for it again and again every cycle – save those larger payouts for the corporate farms.
Farmers are the wealthy, in general. If you don’t have access to significant capital, you’re not a farmer.
“Corruption is only bad if I’m not involved”
Audi has worked hard to cultivate our own image of being boring, unreliable, AND expensive so we deserve credit!
Ah, but it is true in part. Platform sharing, engine sharing, tech sharing. I’ve owned many cars from both brands, but many audi products are just overpriced VWs. Look at the Q3. It’s an overpriced Tiguan. The ID.4 and the Q4? Same. I get that the “real” audis get their engines flipped around the “right way” but other than that, parts sharing is real, especially where the parts aren’t seen. 2.0t EA888 engine anyone?
TBQ:
1st car: 1987 Acura Integra. Bought for $4200. Sold for $4000 years later after a lot of welding done to shore up the rotting unibody.
2nd Car: !985 300ZX NA. Bought for $1300, lots of welding done to shore up the rotting unibody, sold several years later for $2000.
3rd car: 1989 Thunderbird Supercoupe 5 speed. Bought for $3200 in good shape with no rotting unibody. Drove for three years. Sold for $3250.
I did much better on cheaper cars than I have on more expensive models.
TBQ: I just scored a great deal this week. Audi is giving me a brand new A8 and I’m giving them a Memorandum Of Understanding that I might at some point pay for it.
Hope that included the warranty.
“why should Audi’s CEO really care”
A. Tariff rates for specific companies are illegal per US and international law
B. Trump routinely breaks his word. The EU made a deal with Trump on Auto tariff rates among other things and then broke the deal in less than a month
C. Trump already has what he wants – the public announcement at his rally. Audi gave him payment upfront with only a pinky promise to get something down the road.
EDIT: Even if Audi had secured payment upfront that isn’t even safe in the current USA. Remember that Trump extorted Intel for 10% of the company in exchange for keeping a federal grant that had already been issued.
Audi: “Oh, Audi is just a luxury Volkswagen.’ It’s not true, but if they are built in the same plants, that reinforces that perception.” Lol, maybe in German Executive Fantasy Land it’s not true, but to the average American consumer it certainly is true and Audi has not done anything to disabuse them of that notion. Like an Atlas and a Q7 are really, really similar.
Everyone relying on China for their bottom line: most predictable outcome ever. If you hold shares in these companies, you should be calling for a new board, because it’s just corporate malfeasance at this point to expect non-Chinese automakers to actually make money there (Tesla, as ever, possibly the sole exception).
Lexus being built in a Toyota plant offends no one.
In fact, it’s often touted as a bonus.
Not even close. Impressively wrong.
Probably thinking of Touraeg vs Q7, from when we got the Touraeg
Even then, the Touareg had its differences. Different engines, transmissions, a low range in certain years…Where’s the comparison to the Cayenne, in that case?
:”Well, you see, the Touareg, Q7, Cayenne, Urus and Bentayga all share the same windscreen angle and engine mount location, so really they’re all just gussied up people’s cars”.
If one wants to say “well they all share a platform”, then you might be surprised to learn which arm of VAG developed MLB.
I used to have an Audi A3 that was just a slightly nicer VW, and it was great. Now with how fancy everything is getting, I would just want to have a VW that is more basic and simple, so Skoda would be the answer…
And nobody knows what will happen to this ‘nothing’ if the Republicans lose in Georgia
Brilliant. The problem isn’t only that Döllner made a complete ass out of himself for nothing, he might even succeed in turning said nothing into even less than nothing after the election.
I doubt Georgia is going to do a 180 on their business-friendly incentives if the Democrats come into power. The state government has leaned hard into “right-to-work” labor and attracting car manufacturing.
You’re probably right. But that would make it even harder to understand why he chose to align publicly with Trump on his rally at this exact moment.
Yeah that was an exercise in poor judgement.
We first described Audi CEO Dollner as a “Disgrace” earlier this week for appearing at a Trump Rally. Now people are “Disgusted.”
At this rate, someone will call him “Despicable” by some time next week.
Daffy Duck is the natural choice for the job.
Unfortunately, Eric Bauza, the voice actor for Daffy Duck passed away Sunday.
That’s fine. We’ll get Ringo Starr to do it as Henry. 😉
I organized an online thing for a co-worker that needed a cheap car fast. Single mom, crashed hers w/ the kiddo out looking at Xmas lights. I posted on GRM hoping for donations to buy a user’s cheap $1500 Malibu Maxx.
He ended up donating the car to me, people said keep the donations, AND KEPT DONATING. I ended up gifting her a free car & a check for $3300 a couple days before Xmas. Does that count?
Bravo! Those kinds of sudden expenses are life changers in both directions.
This deserves COTD just for the wholesomeness.
It really feels like Audi’s CEO made a deal with the Devil here. Now we just wait and see when this bites them back.
TBQ:
Saw an old Cadillac for sale at a car lot for $3800.
Offered seller $1700 for the car.
Seller countered with $1750 (a shrewd negotiator).
Bought car for $1730 plus tax (paid cash and I think I accidentally shorted him a twenty).
(some time later)
Rear ended by a Communist (not an insult; she was a member of a communist party).
Got a check for $1800 from the Communist’s insurance company.
Repaired car with $100 in junkyard parts (not perfect, but close enough).
Sold car for $2000.
I’m not sure if this counts since it required a minor car accident, but it seemed like a good deal since it cost me -$1970 to own this car for two years.
tbq: I got my first car (a ’70 Cutlass four-door) in a trade for a a 386DX40 motherboard with 8 megs of RAM. Not even the whole machine, just the motherboard and a bunch of SIMMs.
The Cutlass wasn’t great, but it depreciated slightly slower than the motherboard did.
JdN being the voice of reason was not something I had on my agenda for the day.
I’m not sure. Give this space an hour and check the comments for “fancy VW”. People are gonna think what they think about a brand regardless of where it’s built. That’s assuming the people leasing Q3’s even have the vaguest inclination of where their car was built. My wife’s car was built in Bratislava. You think she knows that? It could’ve been assembled in Djibouti for all she cares. Is Mexico really better than Tennessee? They should’ve co-located w/ VW and saved themselves a ton of money and trouble.
I agree with you, and on my first reading thought that JdN was pushing back against the “we can’t build in Chattanooga, it will devalue the Audi brand” narrative. On a second reading I’m not quite so sure.
Yeah it took me two reads as well. Had to redo the whole comment lol.
A: Audi. Maybe if they made both better and more interesting products more people would buy them. To many like myself its just a fancy VW with all of the awful VW problems. So its not just China, its their lineup of models that also needs a kick in the pants
B: Ford. When were these numbers pulled? I’m having a hard time understanding how and why anyone would go out and buy some large gas guzzlin’ full sized truck with gas at $6 a gallon. Then again most reports show that Americans are really bad with money and most haven’t saved a dime for retirement. So going out and buying a impractical truck seems pretty Murican’ then so maybe I won’t be surprised.
Elon told me I don’t need to save for the future because AI will take all the jobs and there will be an abundance. I think there is an abundance of stupidity but he’s a trillionaire and I’m working the daily grind so what do I know?
We’re heading for an iceberg sir, orders?
Full speed ahead, MOAR TRUCKS!
Yeah, this is entirely an Audi problem. If your cars aren’t interesting or luxury enough to distinguish themselves from the down-market platform mates, then you’ve failed. Blaming the consumer isn’t going to help.
You answered your own question re: F150