Audi Aiming High in China

The German luxury vehicle manufacturer Audi is aspiring for more profits and larger sales amount in China.

Every company dreams of turning from the pursuer to the leader of the industry it is engaged in. Although Audi was busy catching up with its German competitors BMW and Benz, they got accustomed to the change and began to win laurels for it.

In consideration of Audi’s leading position in West Europe and Asia and the improvement of its market share in the USA, Rupert Stadler, Audi’s CEO and board chairman, set out to think of how to increase the gap between Audi and its rivals.

“Luxury” is more or less the feature of those charming and competitive vehicles like Audi. Another feature would be the emotional value, which means that the consumers, once choosing one brand, will keep their loyalty to the brand if their trust is not proved wrong. Audi, the runner-up of German luxury vehicles, will re-define the meaning of its luxury vehicles.

Audi’s 2020 Strategy

On March 9, 2010, Audi held it’s annual in its headquarters in Germany. Rupert Stadler intentionally wore a bright red tie, which was different from his usual attires, in order to celebrate Audi’s success in fighting against the financial crisis last year.

“In the 2009 financial year, Audi delivered 949,729 new vehicles. Although our sales, turnover and profit before tax witnessed a decrease, the return of investment increased to 11.5% and the pre-tax margin was 6.5% in the 2009 financial year, showing that Audi was still one of the most profitable auto companies in the world,” said Stadler.

This trend seems to continue in 2010. In January and February, Audi sold 153.7 thousand new vehicles in the world, up 28.7% year on year. Moreover, it surpassed Mercedes-Benz which sold 145 thousand vehicles in the same period and reduced the gap between BMW which sold 173 thousand vehicles.

In 2009, Audi declared that it was striving to become the top luxury vehicle manufacturer in 2015. One year later, Stadler told the public that Audi got a new plan, which was on the one hand more practical but on the other hand more aggressive.

“The financial crisis is not completely gone, but we are more optimistic towards Audi’s future. Our new goal is to sell one million new vehicles this year.”

“Courage is needed when we set up the goal for 2010 in which the financial crisis still affects the world. We have got the guts but our rivals haven’t,” said Stadler.

In order to build attractive and successful models to improve the competitive power, Audi made the improvement of their products image and the enchantment its long-term goal. It is also an important part of Audi’s 2020 strategy, which is dedicated to “making our customers all around the world happy”.

Driving Force from China

Right now, Audi is still trying to catch up with its peers in the US market. Therefore, it lays more emphasis on the consolidation of its position in China. In the first two months, Audi saw its sales in China surpass the one in Germany for the first time. Its largest market had for the first time changed from Germany to a overseas market.

In Audi’s new development strategy, China plays an important role once again. Audi plans to sell one million vehicles in 2010. One fifth of this amount will be sold in China. Previously, Audi planned to increase the sales in China to that number in the year of 2014.

This German company, which was used to stable development pace, has decided to try new measures by launching personalized vehicles, electric cars and hybrid autos in China.

The most important task for Stadler is to improve Audi’s image for the high-end Chinese customers. Audi A6L was once established as the cars for the officials of the government’s departments. Now it is still the most popular Audi vehicle in China. The personalized and featured Audi Q5 will be launched in China this year. In addition, Audi’s product diversity in China seems to be too small compared to its competitors like BMW and Lexus.

To repair the defects, Audi plans to launch more products in China and increase the investments in the internationalization of its brand.

“We believe that the brand establishment needs support from the products, especially the ones filled with emotional feelings and exciting elements. Therefore, we will launch the new models of TT, A3, A5 and A8 in China this year. At the end of this year we will also bring the new A8 into China,” said Stadler, who hopes that these new cars will promote Audi’s performance in China.

The sales data in the first two months of 2010 proved that the market and customers have already shown interest in Audi’s personalized product. In that period, the sales of imported Audi vehicles in China increased by 150% year on year.

Furthermore, Audi is also planning to introduce various kinds of new energy vehicles in China. According to the introduction, Audi Q5 Hybrid is on the plan of coming into China. When Audi makes a breakthrough in the battery technology, people will see Audi electric and hybrid vehicles flocking into China.