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March 28, 2017

Audi China dispute with dealers escalates

The dispute between Audi and its Chinese dealers continued to escalate in recent weeks with dozens of dealers now refusing to accept new stocks of imported models, according to local reports.

The dispute between Audi and its Chinese dealers continued to escalate in recent weeks with dozens of dealers now refusing to accept new stocks of imported models, according to local reports.

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The row erupted last November after Audi announced plans for a new joint venture to produce and sell cars with the SAIC group. This is a rival group to its current joint venture partner, FAW Group, with which its current dealers are affiliated.

Current dealers are concerned about access to future models from the new joint venture and that a new SAIC-affiliated dealer network may damage their long-term prospects.

Dealers accuse Audi of not doing enough to respond to rising competition within the country’s luxury segment with overseas rivals expanding aggressively in this market.

While Audi sold a record 589,000 cars in China last year, its poor performance since then is a growing concern. 

In the first two months of 2017, Audi’s sales declined by 24% to 67,300 units, according to local reports, while rival Mercedes-Benz’s sales rose by over 40% to 95,000-plus units and BMW sales were up by close to 15% to 92,000 units.

Local analysts believe more of Audi’s 450 dealers may join the import sales boycott which, no doubt, will further undermine Audi’s decades-long dominance of the country’s luxury car segment.

China has been Audi’s largest single global market since 2010 which makes this more than just another local dispute.

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Global investment in 2022 has been majorly dominated by North America, Europe, and Asia Pacific, whereas the Middle East, and South and Central America have recorded low investments comparatively. In light of this, Europe and North America have been identified as the major destinations for Private Equity and Venture Capital (PE/VC) investments.   GlobalData’s whitepaper analyzes which sectors PE/VC firms have been investing in, looking at Technology, Media, and Telecom, with these sectors recording $356 billion and a deal volume of over 10,000 deals in 2022. Healthcare, Financial Services, Business & Consumer Services, and Construction sectors have also seen high investment activity by PE/VC firms, recording a deal value of over $70 billion each.   But what can this mean for you?   Understand how the Deals Database on GlobalData Explorer can be leveraged to:  
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