The "North and South Audi" plan has failed? Dealer farce shows that SAIC Audi's move may not be worth the loss

The Audi brand hopes to replicate the "North-South Plan" similar to that of SAIC Volkswagen and FAW Volkswagen, but it is obviously not going so smoothly.

On the afternoon of November 21, representatives from nearly 30 FAW-Volkswagen Audi dealer groups across the country gathered in Foshan and met and negotiated with Dr. Johann von Fürth, director of sales and marketing at Audi Germany, Wei Yongxin, general manager of Audi China, and Ren Siming, general manager of FAW-Audi Sales Division. They reached a unanimous agreement to firmly oppose Audi's plan to cooperate with SAIC, and even issued an ultimatum to stop picking up cars.

"You can have a new brand, but you may have no place to sell the cars." This subtext thrown out by Audi dealers before the birth of SAIC Audi made the marriage between SAIC and Audi itself seem unsmooth and unprofitable.

Luxury brands with the lowest sales growth rate, is the North-South split making things worse?

Judging from the automobile market, Audi has not had an easy time in the past few months.

Relevant data show that although the sales of the three major luxury brands, Mercedes-Benz, BMW and Audi, in China have shown a growth trend, in September this year, the sales of Mercedes-Benz and BMW both increased by about 20% year-on-year, while Audi's sales increased by less than 3%. From January to September 2016, the total sales of Mercedes-Benz and BMW also increased by 29.5% and 11.1% year-on-year respectively, while Audi's sales were 6.2%, still ranking last in terms of growth rate.

At the same time, Audi's main model Q3 in the Chinese market sold only 5,489 units in October this year, the lowest result in five months. Compared with September, sales fell by 40%. Compared with its competitor Mercedes-Benz GLA, which requires a price increase to pick up the car, Audi Q3 also offered a general discount of 15,000 to 36,000 yuan.

Sales growth has shown signs of fatigue. Audi, the leader in China's luxury car market, has always been facing the dilemma of being besieged by Mercedes-Benz and BMW. It is becoming increasingly difficult for dealers to make profits, and they even have to rely on manufacturer subsidies to survive for a long time. Those who now sell FAW Audi naturally do not want SAIC Audi to come out and share the increasingly smaller pie.

In a sense, the idea of ​​SAIC Audi cooperating with FAW Audi to form a "North and South Audi" situation may be due to the success of the "North and South Volkswagen" strategy of SAIC Volkswagen and FAW Volkswagen, and it also provides the prerequisite for the replication of higher-end Audi brands.

What kind of car brands will implement the "dual lane" approach in the Chinese market? Volkswagen is one, and Toyota and Honda are also representative success stories. Like Volkswagen, the Japanese "two Toyotas" also focus on the low- and medium-priced mainstream car market. These models have a wide audience and market demand, and can quickly launch "re-shelled" models such as Dongfeng Honda XR-V and Guangqi Honda Binzhi. However, these are not available for Audi, which focuses on the luxury car market.

Will Audi, the first to launch the North-South strategy in the Chinese market, have a counterproductive effect, or even make the existing FAW Audi life more difficult? Audi dealers who directly face consumers will inevitably have great doubts about this.

Is there a need for SAIC Audi, which focuses on individuality and sports, to exist?

The shrinking growth rate of the luxury car market and the rapid rise of competitors have brought considerable challenges to Audi in the market. At this time, the chances of success for Audi to continue to "squeeze out" a SAIC Audi in its domestic territory are even slim.

Why do you say that? Obviously, the A4, A6, Q3, Q5 and other Audi models that are recognized by most Chinese consumers have all been localized in FAW Audi, accounting for the vast majority of the brand's sales. The only options left for SAIC Audi are the A5, A7 and Allroad models that may continue to be localized. The main focus on personality and sports has also become people's main speculation about the brand tone of SAIC Audi.

However, in the domestic automobile market, there are very few models that have successfully used personality and sportiness as selling points. Moreover, the positioning of Audi A5 and A7 models should be higher than that of A4 and A6, further narrowing the consumer group they cover. If SAIC Audi's own positioning is that it has no shortage of money and pursues a unique elite style, then it seems that there is nothing wrong with FAW Audi currently bringing non-domestic Audi models to the country through import channels.

Of course, according to previous news, Audi has officially signed a cooperation framework agreement with SAIC Volkswagen on November 11 this year to establish a new joint venture sales company with a 50:50 equity structure. The birth of SAIC Audi is irreversible, but is this "second son" of Audi in China a "good kid" or a "naughty kid"? In other words, can the wishful thinking of "North and South Audi" work? The future is uncertain.

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.