Rising competition, lackluster designs pose barriers to brand's future: experts
German automaker Audi AG reported a record monthly drop in sales in January across the Chinese market, losing ground in the luxury-car sales race in the country for the first time.
Experts said Wednesday that Audi faces intensified competition from rivals like BMW Group and Mercedes-Benz as well as rising second-tier luxury car brands in the domestic market.
Audi sales in China tumbled 35.3 percent year-on-year in January to 35,181 vehicles, according to information released by the company on its website on Wednesday.
"In the last month, Audi established a long-term, strategic growth plan for the coming decade together with its Chinese partner FAW," said the company, noting that given current conditions, Audi dealers in China expected a "restrained business volume" at the start of the year.
The performance in China, the world's largest auto market, affected the company's overall sales: global deliveries fell 13.5 percent from the record-breaking figures for the year-earlier month, according to Audi.
The ground Audi lost in the Chinese market in January was shared by its competitors like Mercedes-Benz and BMW Group and some rising second-tier luxury car brands, Wu Shuocheng, a Shanghai-based independent analyst, told the Global Times on Wednesday.
Audi began experiencing slow growth about 18 months ago and it seemed inevitable for the brand to be beat in luxury-car sales in China, Wu said. "But it is has been a bit faster than expected [that Audi lost ground]," he said.
Mercedes-Benz started the new year with 39.3 percent growth: at least 58,799 of its vehicles were sold in the Chinese market in January, the company said in a post on its website on February 2.
BMW Group on Friday said its sales in the domestic market achieved double-digit growth in January, hitting a new record.
A total of 51,345 units of the premium brands BMW and Mini were delivered to Chinese customers, up 18.2 percent on a yearly basis, the Xinhua News Agency reported.
Feng Shiming, a car analyst at Menutor Consulting, told the Global Times Wednesday that Audi's new designs pale in comparison with those of Mercedes-Benz, making the vehicles less attractive to the nation's increasingly picky drivers.
Feng forecast that Mercedes-Benz will become the sales leader among luxury cars in 2017 in China, followed by BMW and Audi.
Audi is likely to strengthen its management and address issues with its dealers and corporate partners, Feng said.
Car sales in January increased at the slowest pace in nearly a year, the China Association of Automobile Manufacturers said Monday.
Sales rose 0.2 percent year-on-year to 2.52 million vehicles last month, the weakest level since February 2016.
