Audi and SAIC suspend some negotiations to appease dealers

Recently, Audi China, the Audi Dealer Association of the China Automobile Dealers Association and Audi investors/dealer representatives reached a consensus that in order to appease FAW-Volkswagen Audi dealers, Audi's negotiations with SAIC Group on sales and network will be suspended.

According to internal documents exposed on the Internet, Audi reached three demands with several parties:

1. Ensure the current and future competitiveness and profitability of the existing FAW-Volkswagen Audi dealer network;

2. Improve the management and operation capabilities of the regional sales network of Audi Sales Division;

3. The next steps of the cooperation plan between Audi and SAIC Group.

Audi China's internal executives have already organized a negotiation team to handle the above two issues 1 and 2. Regarding issue 3, in view of the fact that FAW-Volkswagen Audi dealers have not reached a consensus on the cooperation between Audi and SAIC, Audi agrees to 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, the next step of negotiations will be conducted with SAIC. Audi, SAIC and FAW-Volkswagen Audi dealer association negotiations will begin before the end of March 2017, and FAW will also be invited to participate if necessary.

Previously, FAW-Volkswagen Audi dealers had threatened to stop picking up cars from the manufacturer on December 1 to protest. At the last minute on November 30, Audi adopted this agreement to avoid a breakdown in relations with existing dealers and to leave room for future negotiations. We will continue to pay attention to the cooperation between Audi and SAIC Volkswagen and the related events it has triggered.

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