Audi firm on growth in China, plans to offer entire portfolio

The A6L e-tron co-developed by Audi and its joint venture in China, FAW Volkswagen. It will hit the Chinese market next year.[Photo provided to China Daily]

Sales slowdown in largest market no barrier to company

German premium carmaker Audi AG remains firm on its growth course in China and says it will offer its entire product portfolio to local customers over the next couple of years, although the company's deliveries in its largest single market have lost steam this year.

Dietmar Voggenreiter, the outgoing president of Audi China, said recently in an interview that the brand's target to sell 700,000 cars annually in China by 2020 is still "totally in place" and it has made all product decisions, despite a sharp sales slowdown this year.

"We are very well prepared for our 700,000-unit plan. We have a lot of good products in the pipeline. We are really confident for the Chinese market in the medium and long term," Voggenreiter stressed.

He said nearly all of Audi's worldwide product portfolio of 60 models would be available in China by around 2020. The company now has 37 models in the country.

In the first half of this year, Audi's China sales rose only 1.9 percent year-on-year to 274,000 units, maintaining its two-decadelong premium market leadership. Last year, the company moved nearly 579,000 cars in China, up 18 percent.

"I was clear all along that this year would not be an easy one. It would be a year of single-digital growth and a year of transformation because two-thirds of our sales volume will be renewed in the second half of 2015 and the first half of 2016," Voggenreiter said.

He attributed the slowing sales this year mainly to the overall market deceleration in China and the company's lack of new volume products except several niche models, such as the all-new TT, A3 e-tron plug-in hybrid, A6 Allroad and Q7 large SUV.

Audi announced last month that Joachim Wedler, the former head of the company's division of Model Series at its headquarters in Ingolstadt, Germany, will succeed Voggenreiter in China from Sept 1.

Voggenreiter, who started working in China since 2007, will remain executive vice-president of Audi and move back to Ingolstadt at the end of this year to take on new high-profile tasks.

Overall vehicle sales in China climbed by 1.4 percent to 11.85 million units in the first half of this year, according to the China Association of Automobile Manufacturers. The association has lowered its forecast on full-year growth from 7-8 percent to 3 percent.

Voggenreiter said Audi would have lots of facelifts and all-new models in China next year, such as the new A4 midsized sedan and A6L e-tron plug-in hybrid, which will both be produced locally. The A6L e-tron is co-developed by Audi and its joint venture in China, FAW Volkswagen.

The joint venture, in which Audi has a 10-percent stake, now produces a slew of Audi and Volkswagen models. Volkswagen Group has a 30-percent stake of the venture, with the rest controlled by China's FAW Group.

Growth potential

Voggenreiter predicted that the premium car market has further growth potential in China and will grow faster than the entire vehicle market as the premium market share here only stands at 9 percent, much lower than the 15-20 percent in Western markets.

The A segment (compact cars) will grow faster than the B segment (midsized cars) and C segment (large-sized cars) in the premium car market in China, he said.

"We will see further segmentation in China in more niches and concepts. It's no longer only a limousine market. So it's clear to me that China's market will become increasingly sophisticated in the future," he added.

He said as there will be more young and female car buyers in China, Audi will keep working at building itself into a "more emotional" premium brand in this market with more fashionable and sports models over the next five years.