Volkswagen Group's Design Center California in Santa Monica will close in November, according to company sources.
At around the same time, Audi plans to open its first U.S. design studio, in Malibu, Calif., the insiders said.
The Santa Monica studio, which employed around 80 people, already has lost about two-thirds of its head count. In January, the building will be taken over by Snapchat.
The studio, led by Jens Manske, never had the impact of VW's Simi Valley, Calif., studio, which it replaced a decade ago. Its most notable contributions are the 2007 Audi Cross Cabriolet concept and the interiors of the next-gen A3 and Q3.
Simi Valley, by contrast, was a hotbed of creativity. Its output included the original VW Concept 1, which morphed into the New Beetle; the original Audi TT; the Microbus concept; the VW GX3 concept; and early contributions to the second-gen Audi A8.
Closing the Santa Monica design center is part of a larger reshuffling centered around three "future centers" that will reflect VW's new focus on electric mobility, modern user interfaces and telematics.
The U.S.-based future center is in Silicon Valley, as an extension of VW's Electronics Research Laboratory. Unlike the Santa Monica studio, it will not have modeling capabilities.
The European future center is in Potsdam, Germany; the China center likely will be in Shanghai. These centers will have an engineering director reporting to VW's chief digital officer, Johann Jungwirth, and a design director reporting to VW Group's head of design, Michael Mauer.
Audi's new studio in Malibu will be much smaller than VW's Santa Monica center and will not have vehicle modeling capabilities, company sources said.