Company Looking To Sell 200,000 Cars In China This Year, Over 150,000 In 2009
The China market has been good to the luxury German automaker Audi (previously on Jing Daily), which sold 150,000 vehicles in China last year and expects that number to swell to 200,000 in 2010. Having established a far deeper foothold than its competitors BMW and Mercedes-Benz, Audi has retained its spot as the top premium automaker in mainland China for years, although rivals like the now-Chinese-owned Volvo are looking to become a serious competitor in the next 5-10 years.
BMW and Mercedes-Benz have shown that they don’t intend to permanently play second (and third) fiddle to Audi in the lucrative China market, releasing China-only elongated models that have helped both companies close the “Audi gap.” However, Audi, relying mainly on interior growth and the prestige of its name among Chinese car buyers, has kept its new models to a minimum.
This strategy changed this weekend, as FAW-VW‘s Audi division introduced two new models — the A5 and S5 — to the booming China market at a ceremony by Shanghai’s Huangpu River. According to Zhang Xiaojun, the Vice President of FAW-VW Audi China, the impending launch of the A5 and S5 will help boost imports of Audi vehicles into China.
If the company expects to maintain its lead over hungry rivals like Jaguar, Buick and Volvo, or domestic upstarts with luxury ambitions like Geely or BYD, it’s probably going to have to work harder to not only boost imports but also introduce new and China-only models that’ll convince not just first-time Chinese car buyers, but second- or third-time buyers to choose Audi over all others. As Zhang Xiaojun said in an interview this weekend, however, aside from the still-under-development Audi A1 the company has no plans to introduce more models to the China market, or start any large-scale promotions there in the short- to medium-term.
An excerpt of Zhang’s interview (translation by Jing Daily team):
Reporter: (Asking about Audi’s plans to respond to the recent promotional push by BMW and Mercedes-Benz)
Zhang: Indeed, recently Audi’s competitors have launched a number of new strategies in the market, particularly large-scale promotional activities designed to increase sales. I one of the reasons for this is because they have some products they’re planning to withdraw from the market, and they need to kick up their promotional efforts to clear inventory to make preparations for the new car market. But I think [brands] should control their promotional activities within a certain range, regardless of the circumstances, because this kind of large-scale promotion really isn’t a desirable [strategy] for a premium brand.