SAIC Audi Builds Innovative Business Model as Channel Battle Ends

Both in terms of channels and products, everything is new at SAIC Audi.

After four years, SAIC Audi has finally reached an important milestone: on December 23rd, SAIC, Audi and FAW*** announced that they have reached an agreement on future sales and service cooperation:

SAAIC Audi will build an innovative business model, and its products will be sold by the existing network of Audi investors, and after-sales service will be based on the existing network of Audi.

Audi China's President, Mr. An Shihao, said, "It is a great pleasure for us to reach a ****ing understanding on a crucial business decision. Strong local partners are an important cornerstone of Audi's success in China. With the new sales layout, we offer a ****winning solution for Audi to build the next 'Golden Decade' in its most important global market."

It is widely believed that the proposal announced yesterday better balances the interests of SAIC, FAW and Audi in the previously controversial dealer network dispute. Under the premise of ensuring the integrity of Audi's investors, it also reflects the characteristics and demands of "North-South Audi".

And for the so-called FAW-Volkswagen-Audi will dominate the channel discourse, it may be some kind of market misinterpretation.

According to what the car whisperer has learned, SAIC Audi will recruit existing Audi brand investors when it sets up a new dealership network, and if the other party has the will and meets the relevant qualifications, it will set up a brand new dealership network, and its related sales and after-sales business will be independently accounted for, rather than SAIC Audi's products being sold directly in FAW-Volkswagen-Audi's dealerships.

In addition to this, the car whisperer also noted that SAIC Audi is also committed to building a new business model while forming a separate traditional dealership network.

SAIC Audi said: With the development of the Internet, consumers are demanding more and more precision and personalization of services. SAIC Audi is committed to changing the way the brand communicates and interacts with consumers, opening up information barriers in marketing, sales, after-sales, service and other aspects, and creating a more convenient, trustworthy and exclusive physical e-commerce eco-experience.

It is worth noting that with the entry of Tesla and the rise of new car-making forces, the auto sales industry is also undergoing huge changes.

Tesla has introduced Apple's sales model into the automotive industry, opening Tesla's directly-managed city showrooms in core business districts while conducting network sales. On the one hand, it increases brand exposure and can also draw traffic for online sales. This move has since been borrowed by new car-making forces, with Azera, for example, opening its first directly-managed center in Wangfujing Oriental Plaza in Beijing. Sources say the 2,000-square-meter center has an annual rent of nearly 100 million yuan.

As to whether a similar marketing approach will be adopted, SAIC Audi told Car Talk: "The specific model and related details are yet to be further disclosed in the future, but the close integration of online and offline is the future direction." This statement is also in line with the tone set by SAIC Chairman Chen Hong for SAIC Audi in June this year, "In the future, SAIC Audi's marketing channels will be synchronized online and offline."

In addition to channel construction, SAIC Audi also made it clear in its announcement yesterday that its first model is scheduled for delivery in early 2022.

And SAIC Audi's product matrix has always been of great concern to the outside world. Previously, photos of the SAIC Audi A7L road test have been exposed by the media several times.

In May this year, information from the engineering and construction project trial management system of Zhejiang's government service network showed that SAIC Volkswagen would revamp the production line of its Ningbo plant to produce Audi's C-grade SUVs. In July, Reuters reported that Volkswagen and SAIC planned to invest 4.13 billion yuan in revamping its auto plant in Shanghai to produce new Audi sedans. According to previous plans, SAIC Audi will launch four models in the future: an A+-class electric SUV, the A7L, a B-class SUV, and a C-class SUV.

Since 2018, although China's auto market has been in the cold, the luxury car market has been bucking the trend of growth, which can't help but make SAIC Volkswagen miss out on the dividends of the luxury car market. But with the landing of the SAIC Audi project, especially after clearing the channel obstacles, SAIC Volkswagen is expected to seize the share belonging to the luxury car market in the future. And with the integrity of investors guaranteed, the Audi brand is also expected to gain new growth momentum in China through SAIC Audi.

This article comes from the authors of Automotive House Car, and does not represent the views of Automotive House position.