Premium carmaker Audi has announced it will cut 7,500 jobs by 2029 in Germany. It cited "enormous challenges" as the country's auto industry struggles with slowing demand for electric cars and growing competition from China.

The cuts amount to about 8 percent of Audi's global workforce. They aim to boost "productivity, speed and flexibility" at plants in the home market, the manufacturer said.

"Economic conditions are getting tougher, competitive pressures and political uncertainties are presenting the company with enormous challenges," Audi, a Volkswagen subsidiary, said in a statement.

It's the latest bad news from the troubled auto sector in Europe's biggest economy, which has been hit hard by a stalling shift to electric cars, fierce competition in the key China market from domestic rivals and weak demand.

Audi, headquartered in the Bavarian city of Ingolstadt, said the cuts would be in areas such as administration and development and would be carried out in a "socially responsible" way. This means there will be no compulsory redundancies, AFP reported.

The automaker employs about 88,000 people worldwide, including 55,000 in Germany.

The job cuts are part of a series of measures, including a reduction in bureaucracy, which Audi says are aimed at saving 1 billion euros a year.

However, the carmaker also said it plans to invest around €8 billion in its two largest plants in Ingolstadt and Neckarsulm in Germany, partly to help the transition to electric vehicles (EVs).

This will include investments in the production of another entry-level electric model as well as in artificial intelligence.

Audi has been hit hard by slowing demand for EVs and closed a plant in Belgium in February. It employed around 3,000 people and produced high-end electric cars.

In 2024, the automaker's deliveries of fully electric cars fell 8% year-on-year to around 164,000.

Deliveries in the Chinese market, which accounts for nearly 40% of the global total, fell by about 11%.

Audi's parent company Volkswagen, which makes 10 brands in total, announced in December that it would cut 35,000 jobs at its eponymous VW brand in Germany by 2030. | BGNES