Audi predicts sales growth in a challenging market

German premium carmaker Audi AG expects mild sales growth in China this year, amid increasingly acute competition as the world's second-biggest economy slows.

In an interview during the Shanghai auto show to be closed on April 29, Luca de Meo, Audi board member for sales and marketing, said the company hopes to move more than 600,000 cars in China this year, up from 578,000 vehicles last year.

In the first quarter of this year, Audi's China sales jumped by 7.1 percent to 133,316 units.

The pace is sharply down from the 18 percent growth which Audi posted in 2014 in China. But it is still faster than a 5 percent rise of the country's entire premium vehicle sector.

Although Audi grabbed one third of the preimum vehicle segment in China, the top premium car brand now faces big challenges from competitors in China.

In the first quarter, the locally-made Audi A6 sedan, the longtime best seller in the large-sized premium sector, was outsold by the BMW 5 Series for the first time.

Michael Renz, Audi's new sales chief in China, told China Daily that the brand wants to keep and even increase its market share in the country with new products and technologies, especially small and highly individualized cars, to meet customer expectations.

Renz, who is now serving as president of the Audi Sales Division at Sino-German joint venture FAW Volkswagen, said that sales volume in the "A and A0 segments" (compact and smaller cars) is expected grow rapidly in China as customers are also looking for "good quality, wonderful technologies and great design" as well as in Europe.

Audi is the first premium brand making small cars in China. It now has locally-made compact A3 sedan and Q3 SUV, and smaller imported A1 available in this market.

In the first quarter, sales of Audi's compact models in China surged by 66 percent year-on-year.

Renz said Audi will bring several plug-in hybrid models into China to cater to local customers' demand for lower emission cars.

The company plans to bring in its A3 e-tron this year. It will also start to assemble the A6L e-tron in China next year, which is jointly developed by teams in this country and Germany.

The all-new conventional Q7 will also be launched in China this year.

Renz said Audi will also introduce Internet-based communication technologies into the country to attract customers.

"Customers in China are becoming more and more mature, and demand more individualization and more expression of their specific styles. With this maturity of customers and the market, the demand on additional differentiated services are also increasing," he said.

Renz predicted there is "a big chance" of further growth in China's premium vehicle market as both the rate of cars per 1,000 people and the premium share in the entire vehicle market is much lower than in the European sector.

"Of course, not everything is beautiful. There are also challenges. Price premium, which is very important when it comes to added value, is under pressure. So competition in the market of luxury products is becoming more and more (challenging)," he stressed.

The company also assembles the mid-sized A4 sedan and Q5 SUV in China, which Meo said have big growth potential. Audi now has two plants in northeastern city of Changchun and Foshan in the south.

China's economy grew by 7 percent in the first quarter of this year, the slowest pace since 2009.

gongzhengzheng@chinadaily.com.cn

An Audi Q7 e-tron car is unveiled during a presentation at the Shanghai auto show. Johannes Eisele / AFP

(China Daily 04/27/2015 page17)