Audi’s Rebrand in China Points to Bigger Changes in the Auto Industry

It’s additionally a rejiggering for the German automaker, which entered China within the late Nineteen Eighties and have become, because of a partnership with home producer FAW, the primary international premium model to adapt its autos to the Chinese language market. For a few years, Audi was synonymous with international luxurious and later turned the usual trip of the party elite.

However the precipitous rise of Chinese language automakers, buoyed by beneficiant state help and a brand new center class, have left international automakers enjoying catch-up. Mitsubishi stopped production in China final yr; Hyundai and Ford have closed or reduced operations at factories. This month, Normal Motors reported that its Chinese language enterprise, operated collectively with a number of Chinese language automakers, has seen gross sales fall by virtually 20 p.c this yr. GM said it might restructure its enterprise within the nation, taking a $5 billion write-down within the course of.

The Volkswagen Group, which sells Audis and likewise Porsches, Bentleys, Å kodas, and Lamborghinis in China, has seen a ten p.c dip in autos bought within the nation this yr. The drop was responsible, partly, for international gross sales retraction that led to a fall in income final quarter. Volkswagen mentioned last week it might dump a plant in Xinjiang.

Nonetheless, as Ahuja factors out, Audi has bought greater than 9 million autos in China. It needs to remain within the nation. AUDI—no rings!—is an try to take action. (Maybe confusingly, the automaker will proceed to promote autos in China underneath the heritage “4 ring” model as nicely.) “I don’t wish to contact that legacy,” says Ahuja. “I wish to evolve it additional.”

The model tweaking additionally factors to deeper dynamics within the Chinese language market, the place international automakers nicely past Audi (or AUDI) are scrambling to take care of a toehold amongst a brand new technology of automotive patrons as Chinese language-made autos soar at home—and overseas. And it factors to shifting dynamics in client preferences which have already proven up on roads nicely outdoors the Asian nation.

Again in 2019, BMW was defending its choice to go large with its 7-Sequence kidney grilles. On the time, BMW group design director Adrian von Hooydonk cited one cause for the large, imposing entrance ends was a “youthful and extra extroverted” China buyer. He additionally went on to say that the grilles would shrink back as “I hear from [BMW’s Shanghai Design Center] that design tastes in China are creating quickly … they’re more and more calling for subtlety.”

Model Translations

For one, Audi’s choice to nix the 4 rings is sensible. Logos like Audi’s 4 rings “are very onerous to defend in China, from an mental property perspective,” says Jeff Lee, a cofounder and companion at Northern Gentle Enterprise Capital, an early-stage Chinese language agency with places of work in Silicon Valley. “It’s very easy to make use of 5 rings or three rings. After which there are lots of of Chinese language automakers. Folks simply get confused.” It helps that “AUDI” is simple to pronounce to Chinese language audio system.