Core Viewpoint - The sale of Italdesign by Audi indicates a strategic contraction within the Volkswagen Group under pressure from the transition to electrification [3][14]. Company Overview - Italdesign, founded in 1968 by renowned designer Giorgetto Giugiaro and engineer Aldo Mantovani, is one of the top automotive design companies globally, comparable to Pininfarina and Bertone [4]. - Volkswagen acquired 90.1% of Italdesign in 2010 through Lamborghini and later transferred full ownership to Audi in 2015, making it a wholly-owned subsidiary [6]. - Italdesign has collaborated with nearly all major automotive manufacturers, including Volkswagen, Audi, BMW, and Ford, and has designed iconic models such as the first-generation Golf and the BMW M1 [8][10]. Financial Performance - In 2023, Italdesign reported revenues of €1.45 billion, with a profit of only €20 million, indicating underperformance relative to Audi's expectations [20]. - Audi's Q1 2023 revenue was €15.43 billion, a 12.4% increase year-over-year, but net profit fell to €630 million from €736 million in Q1 2024, highlighting financial strain [16][18]. Strategic Implications - The decision to sell Italdesign is part of Audi's broader cost-cutting strategy, which includes job cuts and the reduction of non-core assets to improve profitability [21]. - Volkswagen aims to save €10 billion by 2026, with plans to reduce its workforce in Germany by over 35,000 employees, reflecting the need to streamline operations amid declining profits [21][22].