Audi Bets on Split Branding To Regain Spark for China Car Buyers

Article content

(Bloomberg) — Audi AG is doubling down on its dual-marque strategy in China, sticking to its goal of delivering more than 600,000 vehicles this year as it navigates a market where it once enjoyed institutional cachet. 

Article content

The German automaker embraced a new approach three years ago by introducing the lettered AUDI brand without the traditional four rings with SAIC Motor Corp., its local partner. Gernot Döllner, Audi’s chief executive officer, said he was “very happy” with the performance of the first E5 sportback model as a new entrant last year, showing that there’s little cannibalization between the two sets of buyers.

Article content

Article content

Article content

By diversifying its approach, Audi is seeking a firmer foothold in the world’s largest automotive market, where it once accounted for more than two-thirds of cars used by Chinese bureaucrats. The goal with the dual branding is to keep its classic appeal while targeting younger, tech-focused car buyers; the company is pushing forward with a second model, the E7X, unveiled at the Beijing auto show this week along with plans for a third iteration in a year. 

Article content

Article content

“Brand building is always more of a marathon than a sprint,” Döllner said, adding that the rocky start of the year for the E5 was in line with developments in the Chinese electric-vehicle segment, which has seen weaker sales growth as some incentives are phased out. 

Article content

Deliveries in March have started to rebound, Döllner said, adding that it will probably take two to three years to determine whether the dual-brand strategy will pan out. 

Article content

Audi, which entered the Chinese market decades ago, is also seeking to advance its internal-combustion engine lineup, such as bringing Huawei Technologies Co.’s driver-assistance systems to its popular A6L to deliver automation.

Article content

Even so, the features are only available for premium A6L variants and not on entry-level trims, while local rivals tend to offer them as standard or even free of extra charge. Audi chose a tiered approach to the technologies, betting that the three-year price war in the EV market is stabilizing and that gasoline-car drivers will stick with conventional offerings, according to Audi’s CEO.

Article content

Further ahead, the goal is to bring the main Audi brand into the fold in China, he said.

Article content

“Our next big task is to develop the four rings into the new energy vehicle segment step-by-step,” Döllner said. 

Article content

Article content