FAW Audi dealers jointly oppose Audi's joint venture with SAIC Volkswagen
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Audi's plan to form a joint venture with SAIC Volkswagen has made FAW Audi particularly passive. If the joint venture goes smoothly, the recruitment of dealers will start at the end of the year, and it is very likely that the first model after the joint venture will be unveiled during the Shanghai Auto Show next year. All of this caught FAW Audi off guard. However, this rumor, which first broke out from dealers, was strongly opposed by Audi dealers. "We were the last to know the news," an Audi dealer cried. At the China Automobile Distribution Industry Annual Conference held on November 10, the annual industry gathering of Chinese automobile dealers, the rumor of Audi's joint venture with SAIC Volkswagen became the hottest topic in private. "We teased them during dinner, saying that their girlfriends were going to run away with others, and they were the last to know the news," a participant joked. On November 11, media reported that the Audi Dealer Association of the China Automobile Dealers Association sent a letter to Audi (China) Enterprise Management Co., Ltd., inquiring about channel-related matters after the joint venture between Audi and SAIC Volkswagen, and proposed that since the joint venture may cause significant damage to current Audi dealers, the opinions of dealers must be sought before the transaction. An Audi dealer who attended the meeting confirmed the authenticity of the letter, but said that it has not yet been officially sent to Audi China. The content of the letter does reflect the collective voice of FAW-Volkswagen Audi dealers. The letter stated: "Audi's plan to form a joint venture with SAIC Volkswagen to produce and sell Audi models will have a fatal impact on FAW Audi dealers." The dealer association pointed out that the Chinese auto market has entered a new normal of stable development, and the competition in the luxury car market is extremely fierce. Brands such as BMW, Mercedes-Benz, Jaguar, and Land Rover have grown rapidly, while Audi brand has weak growth and slow new product launches, resulting in Audi brand dealers generally falling into a loss-making state. Because your company's sales targets in China have not been adjusted according to market changes, some dealers have inventory cycles as long as 2 months, and the company faces great pressure in normal operation. The dealer association said that under such circumstances, if your company sets up a new sales company in China, it will inevitably cause further damage to the rights and interests of Audi brand dealers. The impact of the above transaction on FAW Audi dealers is fatal. The dealer association requires that before confirming the transaction intention, your company should seek the opinions of dealers, protect their relevant right to know in accordance with the law, and explain and clarify the details of the transaction and how to develop the Audi brand after the transaction. At the dinner on the opening day of the annual meeting, Auto Industry and Economy Network also noticed that some FAW Audi dealers gathered together during the meal and privately discussed the topic of the joint venture between SAIC Volkswagen and Audi. Auto Industry and Economy Network also learned from an Audi dealer that they had not received any notification and were waiting for official news about the current rumors. "Waiting" can only be more passive. At this time, Audi dealers are discussing more about their own future. How to build channels after the joint venture between SAIC Volkswagen and Audi and whether it will affect themselves are what they are most concerned about. This topic should also become the main content of the strategic investor symposium of the Audi Dealer Association (Preparatory) held on November 10. FAW Audi and dealers took the initiative to fight back for the first time through the inquiry letter. During the annual meeting of the circulation industry in Zhuhai, Audi's main dealers, including Guanghui, Pangda, Rundong Group, etc., attended the strategic investor symposium. During the annual meeting of the circulation industry in Zhuhai, Audi's main dealers, including Guanghui, Pangda, Rundong Group, etc., attended the strategic investor symposium. Progress may be faster than expected. This morning, a photo from the signing ceremony between SAIC Volkswagen and Audi went viral. It seems that the SAIC Volkswagen-Audi partnership is a done deal. Photos of the signing ceremony between Audi and SAIC Volkswagen circulated online. Photos of the signing ceremony between Audi and SAIC Volkswagen circulated online. A source revealed to Auto Industry News that according to the current progress, the recruitment of dealers will be launched at the end of the year, and the first model of the joint venture will probably be unveiled during the Shanghai Auto Show next year. In exchanges with many dealer groups and distribution industry professionals, Auto Industry Network believes that SAIC Volkswagen faces four channel approaches after the joint venture with Audi: building new channels; choosing to expand in the existing SAIC Volkswagen channels; using imported Volkswagen channels; partially building new channels and partially expanding in existing channels, and it is not ruled out that some FAW Audi dealers will switch to SAIC Audi brand management. A general manager of a dealer group operating SAIC Volkswagen said that if Audi chooses to expand in SAIC Volkswagen's existing channels after the joint venture with SAIC Volkswagen, he would be willing to try operating this high-end brand. Obviously, for SAIC Volkswagen dealers, trying a new luxury brand of SAIC Volkswagen is very attractive. But he also admitted that the challenge was great. "Current Audi dealers are all facing losses. If we build new ones, the investment will be huge, and it is hard to say whether they can make money." A dealer group manager who does not operate Audi or SAIC Volkswagen believes that building new channels is the fastest way to cultivate channel vitality and is easier to improve profitability than transforming existing channels. However, this method faces land shortages and requires a large amount of capital investment, so it is also the most difficult to implement. Another possibility is to rebuild the existing Volkswagen imported car channels. Zheng Youtian, general manager of Volkswagen (China) Sales Co., Ltd., publicly stated to the media in September that there are currently about 150 Volkswagen imported car channels in China, and 90 Shanghai Volkswagen dealerships have been authorized to sell Volkswagen imported cars. Among the more than 150 Volkswagen imported car dealers, only one-third are profitable. Obviously, these dealers would be happy if they could get the authorization from SAIC Audi. An existing Audi dealer expressed his pessimism about the new channels to Auto Industry Network. He believes that new channels require a lot of capital. At the same time, in the early stage of the joint venture, it is expected that only 1-2 new cars will be launched. The investment in new channels will be difficult to recover in the short term. In addition, Audi's profitability in China is currently limited. Investors will be more cautious about channel construction investment after the joint venture, so the possibility of new channels is small. This dealer believes that the risk of SAIC Audi using the existing Audi channels after the joint venture is the lowest, which seems to imply the willingness to operate SAIC Audi in the future. Audi uses a unified store image worldwide, so the store image of SAIC Audi dealers will not change much. If Audi's existing channels are used to obtain authorization from FAW Audi and SAIC Audi respectively, it seems to be a perfect solution. But obviously, FAW will not agree. Will there be FAW Audi dealers who switch to SAIC Audi? FAW Audi is also aware of the threat of "poaching" from the channel. Although FAW Audi will prohibit SAIC Audi from openly recruiting in FAW Audi channels, it cannot prevent some FAW Audi dealers from choosing to withdraw from the network and switch to another brand. At least a large number of Audi brand management personnel will be poached. It is understood that FAW Audi currently has more than 400 dealerships and plans to expand to 500 by 2017. The joint venture between SAIC Volkswagen and Audi may to some extent curb the pace of FAW Audi's network expansion. Audi dealers are still facing difficulties in making profits at present, and the channels are facing the threat of possible new joint ventures, which makes it even more difficult to deal with. This threat is closely related to Audi's current predicament in China. Audi dealers have pointed out that Audi's current product strength is insufficient, the profit per vehicle is low, and there are big problems in channel construction. The rumors of a joint venture between Audi and SAIC Volkswagen have further magnified the current predicament faced by FAW Audi. An Audi dealer joked, "If Mercedes-Benz sets up a second joint venture in China now, investors will definitely be willing to invest in new channels. At the same time, the two channels will become stronger through competition." However, for the already troubled FAW-Volkswagen and its existing problem-ridden channels, the situation may be just the opposite. 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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