Audi has outlined a growth plan for its joint business with China’s FAW Group for the next 10 years, setting the course for sustainable growth in the brand’s largest global market. The partners will intensify their cooperation in key future fields of the automobile industry.
Within the next five years, the joint venture, FAW-Volkswagen, will add five locally-produced Audi e-tron models to its China portfolio — including pure battery vehicles with a range of more than 500 kilometres.
“Our e-tron offensive lays down a strong marker for the future,” said Rupert Stadler, Chairman of the Board of Management of Audi. “Audi and FAW have cooperated closely together for more than a quarter of a century. With our long-term growth strategy we will build upon this successful partnership.”
By 2025, Audi, with FAW-Volkswagen, will offer at least one locally-produced electrically powered SUV and sedan model in all volume segments and, with this, there will be an e-tron model in each of the six biggest categories. The electrification of production in China has already begun with the Audi A6 L e-tron. The first locally-manufactured plug-in hybrid will be delivered to dealerships before the end of 2016.
Within the framework of the 10-year business plan with FAW, Audi will strengthen its cooperation with the production and development departments of FAW-Volkswagen in the area of electric mobility. In the process, this will pave the way for building up key competencies for future technologies in the joint venture.
Together, Audi and FAW will develop a further field of the future. In 2017, the partners plan to set up a joint company focusing on mobility and digital services. To connect the joint venture more with the trend-metropolis Beijing, selected sales and marketing functions will be based in the capital in the future.
According to the VW Group website, Audi constantly evaluates new business opportunities in the brand’s largest market. The longtime VW Group partner SAIC Motor has entered cooperation talks with Audi to evaluate a long-term collaboration in China. A memorandum of understanding has been signed last week to this effect. SAIC is a partner of VW in the joint venture SAIC Volkswagen.
It is clear that China is more than a priority market for the German automaker which is the market leader here through a slew of joint ventures. Its annual production of cars from all its brands, including VW, Skoda and Audi, is comfortably over 3.5 million units, which is more than india’s total output of cars. VW has, of course, been in China for over two decades and has been growing from strength to strength. The immense potential of the market coupled with high affluence levels of buyers makes it an attractive proposition.
Audi is present in India too, but the luxury market here is still minuscule compared to China. The electric mobility drive is as interesting because this is something that is yet to take off in India despite attempts by the likes of Mahindra & Mahindra.
With Bharat Stage VI norms scheduled to become a reality by 2020, it remains to be seen if electric cars will gain traction in the following decade. Even here, China is clearly ahead which only means that India needs to get far more proactive in driving home the point of clean air. Going forward, there is reason to believe that things will gradually get better where legislation will also play a role in driving change.
By 2020, India will be the largest market with five million cars, even while China is expected to be doing nearly six times as much. Yet, as affluence levels grow, more and more Indians will be inclined to buying cars despite the growing threat to ownership from shared services such as Uber and Ola.