Audi dealers should stop fighting: they are pushing consumers out the door

On November 11, Audi and SAIC signed a framework agreement on future cooperation. Although it was just a framework, it generated a huge response in China - media attention, partners' complaints... However, the most surprising thing was that Audi's dealers in China became the group with the most intense reaction.

Immediately after the signing of the cooperation agreement between SAIC and Audi, a so-called Audi dealer association first issued a public letter questioning many details of the cooperation, and then it was reported that Audi dealers would take extreme actions such as refusing to pick up cars. For a time, it seemed that Audi dealers had decided to break away from the manufacturer.

However, people in the automobile sales channel understand that the struggle between dealers and brands will ultimately result in mutual harm, and the only ones who benefit are competitors.

It is understood that Audi currently has more than 450 dealers in China, with more than 40 new dealers or dealers to be built. Among these dealers, there are partners who have cooperated with Audi since its entry into China, and there are also newcomers who have just signed agreements. We must admit that Audi's joint venture will indeed have different impacts on the future development of dealers.

However, as a corporate dealer, we must also see that Audi's sales growth momentum in China is declining month by month, while the growth rate of its competitors is rising sharply. As a luxury brand, market share and brand recognition are the key to development. How to improve sales performance while ensuring profitability is a matter for both parties, not a unilateral responsibility.

A rational analysis of Audi's current 500 dealers shows that they can be divided into several categories: the first category is the dealer group that established stores early, experienced the period when Audi was the only strong company, and witnessed a period of substantial profits.

These dealers have basically grown into groups and have a strong sense of belonging and responsibility for the Audi brand. For example, the general manager of Chengdu New Element Dealer Group, the largest Audi dealer in Southwest China, once told Auto Prophet that New Element is more of a part of Audi than a partner.

The other type is emerging dealers that have joined Audi in the past five years. These dealers also have certain capital and development capabilities, but due to changes in the overall environment of the Chinese auto market, the input-output ratio of developing dealers is much lower than it was ten years ago. At the same time, due to the intensified competition in the luxury brand landscape, these dealers need to catch up in their development and are also very concerned about the impact of the manufacturer's future strategic direction on themselves.

The dealers who received the most attention in this joint venture are probably the more than 40 dealers who have just joined and signed the agreement. According to the information currently available, this group of dealers is also the group that is most sensitive to the manufacturer's future development decisions.

During the interview, we learned that although this group of dealers have capital support, they have yet to establish confidence and consistency in the company's development. Especially when faced with major strategic adjustments by the company, the dealers are very confused about future development. Therefore, the company urgently needs to make detailed explanations to these dealers and propose future solutions.

It can be found that Audi has the longest cooperation history and trust foundation in the Chinese market. The main theme of the two sides from development to now is win-win, not irreconcilable contradictions as public opinion sees. So what are the dealers most dissatisfied with at the moment?

The signal conveyed by the current public opinion is that dealers are dissatisfied with Audi's failure to communicate with them in advance about the re-joint venture; Audi has not explained the future dealer development channels and how to guarantee dealer rights. However, the dramatic scene is that in addition to these issues, the dealers' most clear attitude is to put forward the demand of "terminating the re-joint venture" before FAW-Volkswagen Audi, which has not spoken yet, which is intriguing.

It is understood that the models currently produced by Audi's partner in China, FAW-Volkswagen Audi factory, include Audi A3, A4L, A6L, Q3, Q5 and other models. These models almost cover Audi's most mainstream high-volume products. It can be said that FAW-Volkswagen Audi manufacturers and dealers hold Audi's best assets.

There are rumors that some dealers are worried that another joint venture will affect the existing profit structure. However, with the changes in China's consumption structure and the efforts of competitors, Audi, once the luxury brand with the most comprehensive product layout in China, is gradually losing its advantage. Facing competition from the same products, companies must make changes, which is a fact that any community of interests must accept.

Of course, in the current situation where it is difficult to compete with competitors in channel development, manufacturers are seeking changes while also considering the interests of dealer partners. During the Guangzhou Auto Show, Volkswagen China President Heizmann said in an interview with Auto Prophet that there is no risk in the cooperation between Audi and SAIC. In the future, as the joint venture project progresses, the interests of all partners in China will be taken into account, and channel construction will be steadily promoted to ensure the stable and healthy development of each dealer.

However, this statement was magnified by the outside world as "there is no risk in the cooperation between Audi and SAIC", implying that Audi does not care about the opinions of its dealers in China, but no other words were mentioned. This guidance has once again changed the flavor of this debate.

From the outside, it seems that there is an indisputable fact that the two parties in Audi's joint venture this time lack some kind of communication. However, when the cooperation is only in the framework stage, the most important thing for Audi's foreign party, FAW-Volkswagen Audi and dealers to do is to maintain close communication, rather than using public opinion to provoke a war and compete for supremacy.

One thing Audi must think about is that no matter who wins the argument, the competitor will be the one who benefits. In fact, during the argument, the manufacturer has already pushed consumers out of its sales door and pushed them to its competitors.

It is an indisputable fact that quarrels are meaningless, protests or refusing to pick up the car will ultimately harm the Audi brand and FAW-Volkswagen Audi.

We should clearly realize that what SAIC and Audi have signed is just a framework without any substantive content, so naturally the foreign party cannot give a precise explanation of the cooperation to its partners in China for the time being. However, once the future cooperation is implemented, how to handle the relationship between the two joint ventures, coordinate dealer channels, and optimize the Audi brand and market in China must be the first problem that Audi will solve.

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.