The head of Audi’s China operations has said the brand was on track to sell 1m cars there over the next three years and was no longer seen as a “government brand”.
China’s once booming car market climbed only 5.3% in the first 11 months after jumping 33% and 53%, respectively, in 2010 and 2009, Reuters noted.
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“This is the first year of the three-year period where we’d like to reach this target to sell 1m, we started already with a new sales record,” Dietmar Voggenreiter, president for Audi’s China operations told the news agency. “So we are well on track to achieve 1m in three years.”
In November alone, the brand delivered nearly 30,000 cars in China and Hong Kong, bringing its January-November tally to 283,600 units, a year-on-year gain of 35.2%. In the first 11 months, BMW saw its China sales up 40.7% with Mercedes-Benz gaining 35%.
Voggenreiter attributed the growth in the luxury segment to a relatively low-penetration rate of high-end brands and expected the momentum to continue into 2012.
Only 8% of overall car sales in China are premier brands, a far cry from roughly 15% in mature markets in the United States and Europe, he said.
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By GlobalData“The premier car market this year has a growth rate of 30 to 40%. So we are very confident next year the growth will be above the passenger car market.”
He said he expects overall car sales will rise 8-10% next year.
To keep up with the demand in China, which replaced Germany as Audi’s largest market earlier this year, the company is adding a new plant in Foshan in Guangdong province that could bring its total capacity in the country to 700,000 units.
Audi also plans to double its full service dealships in China to 400 by the end of 2013, mostly in lower-tier cities.
“There are a lot of cities with 1m inhabitants in China and there is no Audi dealer, so there is potential for Audi,” he said. “We are actually opening every week one 4S Audi dealer here in China.”
Audi has long been a favourite in China and was the only premier foreign car brand on China’s government procurement list until mid-2009, Reuters noted. Its A6 has been and still is a favourite among senior government officials.
That affiliation made Audi a prestigious car in China and accounted for a fifth of its annual sales in the early days.
The official clout also had a downside. Fleets of black government A6s occasionally zoomed around Beijing, violating every traffic rule with impunity and arousing public resentment.
But Voggenreiter said Audi is not just a “government car” anymore. While direct sales to the government have dwindled to a “lower single-digit” percentage of its annual sales, it is also becoming a common family sedan, with 80% of sales to private citizens.
So far this year, Audi has sold more than 3,660 of the imported TT model, which has a starting price of CNY500,000 (US$78,600).
More trendy, upscale models targeting retail customers, such as the Q5 hybrid, S series and RS models, will hit Chinese roads from 2012 onwards, said Voggenreiter.
“It’s part of Audi’s history here in China, but it’s not the major part, the image of Audi has been changing,” he said. “Audi is much more than a government brand, but some still have that image in mind.”
