Audi's turnaround should be thanked to its dealers
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The Audi "cheating scandal" that has been making headlines for nearly a month was finally temporarily settled the night before FAW-Volkswagen Audi dealers issued an ultimatum. On the evening of November 30, after 8 hours of long negotiations, Audi reached three major consensuses on the concerns of dealers: ensuring the current and future competitiveness and profitability of the existing FAW-Volkswagen Audi dealer network; improving the regional sales network management capabilities of the Audi Sales Division; and the follow-up steps of the cooperation plan between Audi and SAIC. In the third part, Audi and SAIC's cooperation, Audi said it would suspend negotiations with SAIC on sales and networks. When the existing dealer network has long-term and stable profitability and after reaching a consensus with the dealer association, it will conduct further negotiations with SAIC. Audi, SAIC, and FAW Audi dealer associations will start negotiations before the end of March 2017. If necessary, FAW will also be invited to participate. When the news came out, people from all sides were excited. Some said that this was a great victory for dealers; others said that if Audi had known this would happen, why would it have done it in the first place? Let us briefly review how events unfolded. The earliest news that Audi would cooperate with SAIC came from the dealers at the end of October. On November 11, Audi and SAIC reached a memorandum of cooperation in Wolfsburg; on November 14, SAIC confirmed its cooperation with Audi in an official announcement. On the same day, Audi also released a "development blueprint" for its Chinese business - the whole document emphasized that it would continue to strengthen cooperation with FAW, but only mentioned the joint venture with SAIC in passing. In the following days, it seemed calm, but undercurrents were surging. Some FAW-Volkswagen Audi dealers were the first to take action. On November 15, the preparatory meeting of the Audi Dealer Association of the China Circulation Association was held in Shanghai, and the Chinese and foreign leaders of FAW-Volkswagen Audi attended the meeting. The two sides parted unhappily. On November 22, during the Guangzhou Auto Show, Volkswagen Group China President and CEO Heizmann's seemingly casual remark - Audi and SAIC join hands, there is no risk at all - completely angered FAW-Volkswagen Audi dealers. At a meeting in Foshan on November 22 attended by Audi AG directors, Audi China general manager and other senior executives, dealer representatives issued an ultimatum to Audi - they would not agree to Audi's cooperation with SAIC, otherwise they would stop delivering cars starting from December 1. The whole process is thrilling and the taste is worth savoring slowly. Audi's joint venture with SAIC was a business event that couldn't be simpler from the beginning. From a legal perspective, Audi did not violate relevant industrial policies whether it chose SAIC as a contract manufacturer or established a new sales channel with SAIC. From a commercial perspective, Audi also had the right to do so. After all, Audi is a public company and is only responsible to its shareholders. From a moral perspective, Audi did not make a commitment to cooperate only with FAW. Moreover, Audi and FAW have been cooperating for 25 years, so necessary communication is definitely necessary. Therefore, simply looking at Audi's joint venture with SAIC, there is nothing wrong with Audi. On the contrary, if the cooperation with SAIC can be successfully achieved, it will be a win-win situation for all parties - SAIC will have a new business growth point; Audi will expand its sales; FAW may seem to have suffered losses, but if it can learn from its mistakes and be brave after knowing its shame, it will also be a great gain. Moreover, FAW can still collect "rent" for another three to five years in terms of increasing its shareholding ratio; as for the dealer level, it may be affected in the short term (dealers suffer losses in many ways), but in the long run, as Audi's balancing act becomes more and more perfect, Changchun will surely not be treated unfairly. Of course, some people would say that SAIC's OEM production of Audi is a setback for China's auto industry and a suppression of Chinese domestic brands... This accusation is a bit too big and goes beyond the scope of what should be considered in corporate behavior in a commercial society. However, why did this ordinary business case, in which all parties benefited (at least there was no immediate loss), lead to a huge uproar and even tensions? To trace back to the source, in one word, it was all done by Audi itself. Audi has been in China for more than 20 years, and has been going smoothly all the way. The position of the leader for many years has to some extent weakened Audi's sense of crisis. From the perspective of brand, it is an indisputable fact that Audi is lower than Mercedes-Benz and BMW worldwide. Although Audi has been re-emphasizing its brand tone in recent years, the effect is not obvious; from the perspective of product strength, Audi is also inferior to Mercedes-Benz and BMW. The best example is the sales of D-class cars. In the direct competition with Mercedes-Benz S-Class and BMW 7 Series, no matter what tricks Audi A8 uses, it is overshadowed by its fellow countryman. The third-generation Q7 is also a good example. Compared with the previous generation, the new Q7 has not been completely transformed in terms of design or product performance-is this due to Audi's conservative design ideas, or is it a mistake in product planning? But the result is that the sales of the new Q7 in the Chinese market can never be described as "great". As Audi itself said, its success in the Chinese market is due to the localization of the entire value chain, but as competitors follow suit, Audi's first-mover advantage has been slowly eroded. In addition, affected by the "emissions scandal", Audi is already facing internal and external troubles. Many years ago, when the news of Audi's intention to increase its stake in FAW-Volkswagen came out, some insiders of FAW-Audi were worried: Audi should act prudently, after all, increasing its stake involves too many aspects, and if it is not careful, it may be exploited by competitors; also many years ago, facing its own rapid pace, some insiders of Audi reflected, "We also want to slow down, but we can't slow down"... Audi has been pushed to this point. In a desperate situation, the joint venture SAIC's "self-rescue" plan was taken out. Little did they know that the current market environment is completely different from that of 20 years ago, or even 10 or 5 years ago. Faced with the pressure from competitors, Audi itself has already lost its composure. Looking back, the consensus reached with dealers on the evening of November 30 was to some extent a good thing - it gave Audi the opportunity to re-examine its future in the Chinese market, rather than blindly pursuing speed, size and number one. From this perspective, Audi should be most grateful to the dealers who have drawn their swords against it. As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity. |
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