Audi, the German luxury car brand, sees its sales in Hong Kong regaining their growth momentum in 2017 on the back of an expected improvement in the city’s property and stock markets later this year.
“The automobile market, as well as the overall retail sector, in Hong Kong is a little bit under pressure at the moment,” Rene Koneberg, managing director of Audi Hong Kong and Macau, told EJ Insight in an interview.
The automobile industry is intimately linked to the property and stock markets, which have remained volatile so far this year, he said. Meanwhile, Macau is also going through a rough patch.
“Hopefully it will be stabilizing later this year and will improve by the beginning of next year.”
Koneberg said Audi recorded a 14 percent sales decline in Hong Kong in the first six months of this year from the same period in 2015, compared with a 25 to 30 percent decline in the entire market in the city.
He explained that Audi is outperforming its peers in Hong Kong due to the strong performance of its Quattro, or “Q”, model, which accounted for 35 percent of its total sales in the first quarter.
Audi’s sales in China, including Hong Kong, grew 5.9 percent to 290,126 units for the first half from a year ago, representing 30.4 percent of its global sales of 953,200 units, which increased 5.6 percent.
The company handed over 81,083 units of the Audi A3 and Q3 to customers in China and Hong Kong during the period, up 21.7 percent.
In April, the company launched the first batch of its A3 e-tron model, a plug-in hybrid vehicle, in Hong Kong and sold out on the weekend.
Given that it takes time for carmakers to put up enough charging stations for electric cars, hybrid vehicle is a good choice for Hong Kong users at the moment, Koneberg said.
“We are very committed to electric driving. In the medium term, what we need to focus in is the plug-in hybrid technology, which gives drivers a choice to either drive with combustion engine or electric engine,” he said.
“We will launch our pure electric vehicles globally in 2018. By the time the infrastructure of charging stations should be well implemented.”
Audi is also coping with production restriction for its A3 e-tron amid a higher-than-expected demand from customers, he said, adding that Hong Kong is an ideal place for electric cars as travel distances are short.
The A3 e-tron has a top-speed of 130 kilometers per hour and a range of 50 km, which means that it can run from Wan Chai to the international airport without charging. Drivers can switch to combustion mode for the return trip.
“The success of Tesla in Hong Kong is driven by support from the government. We will benefit too in 2018 when we bring out our battery vehicle if the supportive measure is still valid for the city,” Koneberg said.
Since 2007, the Hong Kong government has been providing registration tax concessions for environment-friendly private vehicles.
In the fiscal year ended March 2015, it waived HK$8.1 billion of such tax for 1,302 electric cars, according to the Environment Bureau.
The number of registered pure electric vehicles in Hong Kong surged to 3,806 at the end of last year from 1,160 a year ago, according to the Transport Department. The number further grew to 4,899 at the end of April this year.
To boost sales in Hong Kong, Audi has set up a new department to apply digital technology in its sales process.
Koneberg said customers can better enjoy car shows by using 3D glasses as well as experience riding Audi models online.
“Digitalization is important in Hong Kong, where rental is the highest in the whole world. It can bring down costs for dealership,” he said.
Without sufficient space, it is very difficult for dealers to show all the different products to customers.
“We are preparing ourselves for innovative digitalization as we have seen that developments online and offline are merging,” he said.
Prior to his latest appointment, Koneberg was director of brand operations at Audi China. He established the Audi City in Beijing, which is a virtual showroom.
Last Thursday, he attended the official launch of Audi A4 model in Hong Kong.
German brands expected to take on Tesla in HK e-car market (July 18, 2016)
– Contact us at [email protected]