SAIC Audi is gradually losing itself in the luxury car market

Audi is going to make a big move!

According to foreign media reports, Audi Group global CEO Dussman said that Audi is a high-end car manufacturer, and in the future, we will still focus on upward breakthroughs and remain cautious about the development of product sinking.

After that, there may not be a new version of the Audi A1 and Q2. Starting in 2027, Audi will launch fully electric models in every core segment.

For SAIC Audi, it is also going through a test. Wen Zeyue, president of Audi China, said that he is working with SAIC Motor to agree on future development plans for SAIC Audi.

Since 2016, SAIC Audi has not been easy along the way. When we see that SAIC Audi's annual sales in 2022 are 6,280 vehicles, the experience is even more profound. The original intention of establishing SAIC Audi was to expand its plate in China, seize more market share, and regain the top position of the former luxury brand.

The results now are somewhat different from what was expected at the time.

But for a brand new car company that has been unveiled for two years, we don't seem to be too demanding. As Wen Zeyue, president of Audi China, said, "The establishment of a new joint venture is not easy and requires a certain amount of time to grow, which is a very normal phenomenon in the automotive industry." ”

Perhaps, SAIC Audi needs to accelerate the process of growth. So we saw what happened to SAIC Audi in 2023 - Jia Mingdi resigned, Yang Siyao took over, and the new plan that is being agreed.

The dismal operation did not meet expectations

In 2016, Audi sold 590,000 units in the Chinese market, a year-on-year increase of 3.6%, and the growth rate slowed significantly. At this time, although Mercedes-Benz (470,000 units) and BMW (510,000 units) were slightly inferior to Audi in terms of total, the market growth rate of Mercedes-Benz and BMW was very amazing, the former was 26.6%, the latter was 11.3%. The overall sales volume of the luxury car market exceeded 2 million units in 2016, and the situation is very good.

In order to maintain its sales advantage, the cooperation between Audi and SAIC Motor became logical.

The idea is beautiful, but the reality is skinny. At that time, SAIC's Audi project had just shown its signs, which caused serious dissatisfaction among Audi dealers. Because this moved their market cake, the establishment of sales channels and how to arrange product series became a problem of discussion on the surface, and the project was even stranded for a while.

After several twists and turns, SAIC Audi released it in 2021, but also made huge concessions: after-sales service was handed over to the original FAW-Volkswagen Audi dealer; It does not directly compete with existing FAW-Volkswagen Audi products, and launches more niche products A7L, Q5 etron, and Q6 to meet consumer needs; SAIC Audi operates with an innovative business model, and operates through offline direct stores + online apps to complete a user operation experience similar to that of new automakers.

SAIC Audi encountered internal resistance from the beginning, and its development was limited by many conditions, resulting in subsequent market development that can only be described as bleak.

SAIC Audi sold 6,280 units in its first full sales year in 2022, including 3,801 units of the A7L in 2022, 1,721 units of the Q5 e-tron in 2022 and 758 units of the Q6 in 2022. Jia Mingdi had expected SAIC Audi to "sell 3,000 to 5,000 vehicles a month", which was seriously inconsistent with the expected target.

SAIC Audi also experienced an exacerbation of the situation, recalling 1,765 A7Ls in 2022.

We say that SAIC Audi's poor sales performance is not only due to congenital deficiencies, but also related to the rapid development of new energy vehicles. In 2022, the year-on-year growth rate of the new energy vehicle market will be as high as 93%, while the traditional fuel luxury car market will decline by 4% overall. This is not a matter for SAIC Audi, BMW delivered 791985 BMW and MINI cars in the Chinese market in 2022, a year-on-year decrease of 6.4%, and Mercedes-Benz's cumulative sales in China in 2022 will be 753,900 units, a year-on-year increase of 2.61%. Don't look at the year-on-year growth, we look at the US market growth of 15%, the European market growth of 20%, Mercedes-Benz in China's 2.61% growth is really insignificant; Audi's cumulative sales in China in 2022 will be less than 640,000 units, down 10% year-on-year.

I have to say that SAIC Audi planned to establish on the eve of the rapid development of new energy vehicles in China, and it should have seized this precious opportunity, but it was lost in the endless pursuit of market sales, which is indeed a pity.

Depart from tradition Innovative marketing

It can be said that SAIC Audi has not played its due role in helping Audi's business in China. So Wen Zeyue said to agree on a new plan.

In fact, SAIC Audi has been ahead of luxury brands in terms of innovation. Since the debut of the brand, SAIC Audi has opened a new retail model of offline direct store + online App operation, and SAIC Audi is also the first traditional luxury brand.

SAIC Audi has created three offline physical terminals, namely the Enterprising Exchange, Audi City and Audi City showrooms, supplemented by pop-up store roadshows to help consumers quickly understand SAIC Audi's products and brands. The four offline channels undertake service functions such as product display and experience, and users need to complete vehicle configuration selection and reservation online through the official APP. This model ensures a uniform price nationwide and optimizes the consumer's car buying experience.

SAIC Audi's agency system and the direct operation model of the new forces of car manufacturing are still somewhat different, investors and agents jointly build urban showrooms, can use authorized franchise and direct investment, theoretically more flexible form, can absorb more partners in, together to make the cake bigger.

Again, the ideal is beautiful, the reality is skinny. Even Jia Mingdi himself said that "the process of opening the road is difficult."

In the practice of the new model, SAIC Audi also has many details to improve. The most obvious is that although SAIC Audi claims that users can independently choose the configuration and place orders in the APP, when opening the SAIC Audi APP, everyone will find that they cannot freely choose the officially released configuration. Many operations cannot be completed, you must ask professional salespeople, and salespeople also complained that "it is more troublesome to place orders in the APP". Even the price is not uniform across the country, and the accompanying service given by each store is different.

SAIC Audi's most important goal is not sales, but to build and consolidate its brand image. Although this is the consensus of SAIC Audi's top management, the sales volume of a completed sales year is only 6280 vehicles, which is unjustifiable in any way.

Therefore, there is Yang Siyao's takeover of Jia Mingdi, as well as Wen Zeyue's future development plan. What the specific plan is, no more exact information has been circulating yet. It is roughly guessed that it should be reinforcement at the product level and improvement in marketing details.

People evaluate cars

Judging from the problems arising from SAIC Audi's new sales model, Yang Siyao can become the general manager of SAIC Audi because of his previous work experience. Yang Siyao previously worked at SAIC Volkswagen and completed two adjustments to the sales system, one is to adjust the ID. electric series marketing model, and the other is to reduce SAIC Volkswagen's 12 marketing regions to 8, and fully delegate authority.

SAIC Audi is in a critical period, and extraordinary things are being done at extraordinary times. Yang Siyao must be fiercely medicated. With the support of Wen Zeyue, SAIC Audi will surely improve.