Audi still top in premium sector

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Audi has defended its position as the best-selling premium car brand in China last year, a title the German carmaker has kept for three decades.

FAW-Volkswagen displays a localized Audi A4L at the Guangzhou auto show in November. [Photo provided to China Daily]
FAW-Volkswagen displays a localized Audi A4L at the Guangzhou auto show in November. [Photo provided to China Daily]


China's premium car segment, where about 2.4 million cars were sold last year, is like a Hollywood-style blockbuster starring three German giants-Audi, BMW and Mercedes-Benz.


Earlier in the year it looked as if Audi might lose its crown to one of its German rivals, but a strong close to the year meant that King Audi once again reigned supreme.


Mercedes-Benz gained a good start of the line in January 2017, with its sales surging by 39 percent, BMW followed in a close second, while Audi slipped to third place.


The two kept their advantage well into the year. Although Audi started to see acceleration in monthly sales starting June, it had lagged behind in the accumulative sales, bolstering observers' confidence in a shakeup.


"It would be hard to say which brand will succeed this year until the very last minute," said one analyst in November, who asked not to be identified.


None of them would relent their efforts in the closest ever race and Audi, with its 482 authorized dealerships in 203 cities, would not let go of the championship title it has enjoyed for three decades.


Its efforts paid off. With a stunning 68,948 cars sold in December, Audi's China sales totaled 595,288 cars, edging up 1.1 percent year-on-year, according to FAW-Volkswagen's Audi sales division.


As Audi is part of Volkswagen AG, the joint venture FAW-Volkswagen has been producing Audi models in China, where the majority of Audi cars sold were localized.


"Never before had so many Chinese customers taken delivery of an Audi in a single month," said Audi AG in a statement exuding relief and joy.


With this new all-time high, it maintains its lead in the Chinese premium car market, narrowly overtaking Mercedes-Benz's 587,868 units, not taking into account its Smart-branded cars, and BMW's 594,388 units even including its Mini-branded hatchbacks. Despite the victory, Audi is seeing its arch rivals rapidly closing up the gaps behind and gaining pace in its slipstream.


BMW AG sold 1,000 cars less than Audi last year, with the number being some 75,000 in 2015. Mercedes-Benz saw a shortfall of 8,000 of its namesake vehicles, but it became the first premium carmaker to sell more than 600,000 cars a year in China if coupled with its sibling Smart cars.


Premium brands from other countries, despite their small volumes, have been growing faster, eroding the big three's shares.


General Motors sold 175,489 Cadillac-branded cars last year in China, a 51 percent jump year-on-year.


That figures means China has surpassed the United States as the premium brand's largest market worldwide. Sales of Cadillac's popular XT5 SUV totaled more than 6,000 units in December alone, a decent bite of the segment that Audi's Q5 has dominated.


British carmaker Jaguar Land Rover, which sold 146,399 units in China last year, has long thrown down the gauntlet, attempting to make inroads with its localized Jaguar XFL into the segment of business sedans where Audi A6 and Mercedes-Benz E-class have so far dominated.


Toyota's Lexus and Geely's Volvo are growing a larger following too, with their sales growing over 20 percent to more than 100,000 units in China. Facing a rat race of competition, Audi must remain vigilant this year and prepare for another tough-fought defense of its market-leading position in the world's largest car market.


"The year 2018 will be a bountiful year for us in terms of both product launches and branding initiatives," said Jing Qingchun, executive vice-general manager of FAW-Volkswagen's Audi sales division.


Among others, Audi plans to launch 16 new models, including the A8L and the new generation Q5L, into the Chinese market this year.


The A8L will be the world's first mass-produced car that boasts partial autonomous driving functions allowing the car to monitor the driving environment around it.


Audi says it is worth noting that such a system represents one of the top innovations for the brand which no other competitor offers.


Its upcoming full-size SUV, the Q8, will also make its world debut in China this year.


Audi said it would consider the needs of Chinese customers in its research and development as the country has been one of the fastest-evolving car markets worldwide, where new services and newly founded brands dedicated to electric cars are mushrooming.


"Premium brands will feel the impact of new players in a sense, and customers are renewing their requirements about branding, technology and services," said Hu Shaohang, vice-general manager of FAW-Volkswagen's Audi sales division, in a recent interview.


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