Audi, the German luxury car brand, expects its sales growth in China, including Hong Kong, to range between 5 and 10 percent this year, with the operations undergoing normalization after heady expansion pace in the past.
“The times when we had 20 to 30 percent growth annually — such as the years between 2009 and 2012 — are over,” Dietmar Voggenreiter, sales and marketing chief at Audi AG, said in a Hong Kong media briefing last week. “We are undergoing a normalization process.”
“We will go back to a more normal growth rate, like 5 to 10 percent. With a huge sales volume in China, we are happy with our business in the country,” he said.
Maintaining a healthy growth rate is important in order to ensure that dealers continue to make profits, Voggenreiter said.
Audi currently has a network of 3,000 dealers in China, which is sufficient to support the company’s sales growth, the executive said.
The German brand is the largest foreign luxury car seller in China and Hong Kong, with sales of 290,126 units in the first six months of this year, up 5.9 percent from the same period last year. The China sales represented 30.4 percent of the firm’s global sales of 953,200 units.
Following a slowdown in the Chinese economy, Audi saw its sales in the market dip 1.4 percent last year, compared with 3.6 percent sales growth globally.
In 2014, sales growth in China stood at 17.7 percent, while in 2013 and 2012 sales expanded by 21.2 percent and 29.6 percent respectively.
In 1988, the German firm authorized FAW Group, a Chinese automobile maker, to produce Audi cars in Changchun in Jilin province. In 1995, Audi bought 10 percent stake in a joint venture that was formed by Volkswagen China and FAW in 1991. FAW now has 60 percent stake in the joint venture while Volkswagen China owns the remaining 30 percent.
In 2011, the joint venture decided to build a second factory in Foshan in Guangdong province. The facility commenced production in 2014. Currently, the Changchun factory is producing Audi A4L, A6L, Q3 and Q5 models while the Foshan unit is making A3 Sportback and A3 Sedan.
Voggenreiter said it is not practical to fully localize Audi’s production in China as car series such as TT, Q7, A8, R8 and A5 are now imported into China in view of their relatively small sales volume.
“We have localized our main models in China. But some segments, such as R8, will never be big enough in China to justify the investments for localization,” he said.
‘Audi at Home’
Last week, Audi launched a rental car scheme in Hong Kong called “Audi at Home”, introducing it in Asia for the first time after rolling it out earlier in Miami and San Francisco in the United States.
The scheme will kick off at Dragons Range, a luxury housing estate in Shatin, before being extended to other residential buildings in future.
Citing an Audi survey, Voggenreiter said the rental demand for Audi cars from weekend drivers or frequent travelers is high, given that owning a car and having parking lot is very expensive in Hong Kong.
The company may arrange courtesy or demonstrator cars to meet the demand, which is likely to be high on public holidays, he said.
Voggenreiter added that similar car rental programs can also be launched at office buildings or shopping malls.
Once the company gains enough experience in Hong Kong, it will replicate Audi at Home in other Asian cities, he said.
Beijing is among the places where there is good demand for rental cars, given that vehicle owners in the city have to keep their cars off the road at least one day in a week due to environmental protection regulations, the Audi official noted.
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