Audi continues luxury segment dominance

Audi AG, the luxury arm of Volkswagen Group, sold nearly 140,000 cars on the Chinese mainland in the first 11 months this year, up 29 percent year-on-year, the company announced at its centennial celebration ceremony in Beijing last Tuesday.

With a month remaining until year's end, Audi's sales have already outstripped its full-year results in 2008 of 118,118 units.

"The fast growth of the Chinese market this year is really unexpected," said Peter Schwarzenbauer, Audi's management board member with responsibility for sales and marketing.

"If the market keeps growing like this, our sales are likely to reach 250,000 units in 2012 or 2013," he added.

"This is a year of success," said Schwarzenbauer. That success came not only in the Chinese market, but also its overall achievements worldwide.

Schwarzenbauer said that in the European market badly struck by the economic crisis, Audi's 2009 sales surpassed rivals BMW and Mercedes-Benz.

From January to November, Audi sold 40,000 more cars than BMW, ranking it No 1 in its European segment.

The luxury brand also performed well in the United States, decreasing only 7 percent in sales while the overall market fell by 25 percent.

Audi is also catching up with its competitors in global sales, said Schwarzenbauer. The company trailed BMW by 30 percent in 2007, a figure that has been reduced to 10 percent. It was 20 percent behind Mercedes-Benz in 2007. Now it lags by only 5 percent.

In China, Audi has long been the leading brand in the premium segment with a market share of over 40 percent.

Audi in China

"With our long history and experience in China, our huge consumer group, our good cooperation with dealers, as well as the FAW Group, I don't see the possibility of our rivals beating us in the next several years," said Schwarzenbauer.

Audi opened a 1 billion yuan plant in September with an annual capacity of 100,000 units in the northeastern city of Changchun to meet the rapidly increasing demand in China. With its existing 100,000-unit factory, also located in Changchun, Audi now has a production capacity of 200,000 units a year.

Schwarzenbauer said operating a healthy brand requires not only sufficient capacity but also a broad sales network. He said the company will increase its authorized dealerships from the current 149 to more than 200 or even 250.

The company now locally produces the A4L and A6L sedan as well as the Q5 SUV at its joint venture of FAW-Volkswagen in Changchun. It also sells a range of imported models in China, including the A5, A8, Q7, TT and R8.

The company will introduce the A3 and A5 Sportback to China next year. "We will (also) consider the possibility of introducing the A1, depending on how the Chinese market reacts to the A3," said Schwarzenbauer.

He noted that China's urbanization is the major contributor to the growing demand of small-sized vehicle. "We see this ongoing process and we see at the same time the necessity to offer the full range of A-series products," he said.

Three Audi models made their premiere in China at the centennial ceremony last week - the A1 project quattro, R8 Spyder and S5 Sportback. The leading-edge models represent Audi's future direction in making smaller-engine and lighter-body cars, said the company.

Audi was founded in 1909 by German engineer August Horch. The company became the first overseas premium carmaker to build cars on the Chinese mainland when started local production in the early 1990s.

"With the cutting-edge products, Audi expects to become the most successful premium car brand in the world, and China will be an important part of it," Schwarzenbauer said in a speech at the ceremony.

(China Daily 12/21/2009 page6)