Volkswagen group premium brand Audi reportedly has abandoned its target of selling 600,000 cars this year in China, its biggest market, as the country’s stock market fall hit demand for luxury vehicles, news agency sources said.
Audi will update investors and media when it announces first-half results on 30 July, unnamed sources told Bloomberg. Audi’s Chinese sales rose 1.9% year on year to 273,853 cars in the first half but dropped 5.8% in June, alone. Rival BMW’s sales were off 0.1%.
“We’re monitoring the market very closely and anticipate further growth in the mid- and long term,” Audi told Bloomberg.
The report noted Audi had said at the Shanghai show last April annual sales in China including Hong Kong, which hit 578,932 cars last year, were poised to reach 600,000 for the first time in 2015. Since then, the Chinese auto market has suffered as a falling stock market worried consumers. Jaguar Land Rover cut prices and sales targets on Tuesday.
“Basically Audi are saying that the rest of the year will be pretty much flat,”” Arndt Ellinghorst, a London-based analyst at Evercore ISI, said in a note. After more than tripling its Chinese deliveries since 2009, the brand is facing the slowdown as its best-selling A4 sedan is aging, he said. A redesigned A4 is out in September.
BMW has “moderately” adjusted the expansion plan at its plants in Shenyang as the Chinese market is “normalizing”, the automaker told Bloomberg. “We will continue to grow our production volume over the base of 2014 but slowing down the speed of growth.”
Mercedes said it still planned to sell over 300,000 cars in China this year, as new products helped.
BMW cut prices on some models in April, reducing production to prevent a stock build up.