2 months on the market sales encountered Waterloo How does SAIC Audi deal with "growing pains"?

Reporter Gong Mengze

As the first product of SAIC Audi, the importance of the A7L is self-evident. Unfortunately, the Audi A7L sold only 316 units in January, which was less than the imported Audi A7.

For the poor sales of the first blockbuster model in the first month of listing, SAIC Audi gave an explanation that "the A7L is still in the climbing stage, with only the 3.0T version delivered, coupled with only 120 stores in the country, resulting in sales not as expected". However, by February, SAIC Audi A7L sales continued to be sluggish, with sales of only 258 vehicles, exposing savoy Audi's embarrassing situation and A7L product positioning problems.

The domestic A7L debut was cold

SAIC Audi's product layout was hit

Since the launch of the A7 in 2011, this imported C-class car has been hailed as the "most beautiful Audi car". As the brand's first model after landing, and also a luxury flagship model, SAIC Audi made a compromise between appearance and practicality, deciding to turn the Audi A7's hatchback and half-shaped sports coupe into a regular sedan business sedan.

Obviously, the longer body and larger space significantly enhance the commercial attributes of the whole vehicle. The industry generally believes that SAIC Audi wants to enter the market as a "status" of comfortable administration and sports performance, because the purely niche sports coupe is not suitable for the original intention of the highest flagship model. However, at least from the sales performance of the 2 months of listing, the performance of the A7L was not satisfactory, and SAIC Audi's risky attempts based on research and product logic did not trigger a positive response in the market.

First of all, in terms of brand positioning, SAIC Audi has always emphasized the slogan of "In China, for China". In SAIC Audi's view, after staggering the competition with FAW Audi, the product base and models specifically supplied to China originating from niche market segments are reasonable after localization adjustment, and there is also a consumer market.

But in fact, subject to the limited R&D capabilities of the main engine plant, SAIC, as a "caulker" whose global models have incomplete coverage in domestic models, SAIC's special models are not small compared with FAW's global models that have undergone iteration iterations and have innate brand advantages.

Secondly, in the product matrix, SAIC Audi's product blueprint is too narrow and has become a natural weakness. The "Securities Daily" reporter noted that at present, Audi Q2L, Q3, Q5L, A3, A4, A6 and other mainstream models have been included in FAW Audi. Even if it wants to increase sales through high-end models such as electric versions and coupes that have not yet been domestically produced, it has also been taken ahead of the "Audi FAW New Energy Joint Venture" established by FAW and Audi.

In terms of model configuration and price, the price range of SAIC Audi A7L and FAW Audi A6L is 459,700 yuan -777,700 yuan and 419,800 yuan -656,000 yuan respectively; from the power point of view, taking the 2.0T model as an example, behind the difference of 10,000 yuan to 40,000 yuan on paper, it is difficult to beat the lowest starting price of the Audi A6L terminal is only 334,900 yuan, and the lowest quotation of 448,800 yuan that its 3.0TV6 model can get in China is even lower than the starting price of A7L. At the same time, with the rumor that the imported Audi A7Sportback 3.0T version will return, the layout of the A7L two power combinations and as many as 11 models has been hit miserably, and sales may be difficult to see in the short term.

"North and South Audi" will be in the country

SAIC Audi urgently needs to open the self-help mode

For SAIC, for many years, only Cadillac has been a second-tier luxury brand, committed to the shadow of the mainstream luxury camp of the BBA, and in the context of the group strategy of joint venture high-end, "South Audi" has become a must-take move.

For Audi, audi only accounts for 10% of the shares in the cooperation with FAW, and with the opening of the domestic equity ratio, Audi and SAIC can achieve a 50:50 share ratio in the future. More critically, the BBA landscape is changing.

Looking at the 2021 BBA delivery report card, BMW is in the lead, delivering 2.52 million new cars worldwide in 2021, an increase of 8.4% year-on-year; followed by Mercedes-Benz with a total sales volume of 2.33 million units, although not as good as BMW, but it did not prevent Mercedes-Benz from becoming the most profitable of the three companies. According to Mercedes-Benz's earnings report, the group's turnover in 2021 was 168 billion euros, an increase of 9% year-on-year, and net profit rose to 14.2 billion euros (excluding Daimler's truck and bus business) from 4 billion euros in 2020.

Audi also achieved steady growth in 2021, with both operating profit and net cash flow reaching record highs. However, the current establishment of SAIC Audi and the first car record have not given the market too many surprises.

Zhang Xiuyang, director of the China Passenger Car Industry Alliance, said that in order to ensure savoy Audi's "smooth production", the tripartite agreement guarantees the interests and sentiments of FAW Audi's existing investors to the greatest extent, and also avoids the risk of competition in channel interests. But in this model, from the absence of PPE's new electrification platform, to the Audi A7L, which has been criticized for its price positioning, to the concept car of shell ID.6, these are not attractive to consumers and do not bring much business opportunities to existing dealers.

"Affected by the dealer's interest relationship network, the grid-connected operation structure has brought more systematic difficulties to SAIC Audi, making it subject to FAW Audi to a certain extent." Although SAIC is also fighting for its own control initiative through innovation. Zhang Xiuyang believes that the short-term effect will not be obvious, and with the strong entry of cross-border capital such as Apple and Millet into the car, Audi's market will continue to be cannibalized.

At the beginning of this year, Jia Mingdi, general manager of SAIC Audi's marketing business, said: "I hope that the sales scale of SAIC Audi will exceed 50,000 units in the first year (2022). He said that SAIC Audi hopes to help the Audi brand return to NO.1 in the Chinese market, and also hopes that SAIC Audi will become a benchmark in all aspects of experience and service users. In order to achieve the target of 50,000 units, SAIC Audi plans to launch three products: the key model A7L, Q5e-tron, and a full-size SUV to be launched in the second half of the year. Judging from the current sales situation and trend, SAIC Audi really needs to seize the time, otherwise it will be difficult to achieve its wishes.