Reading: Volkswagen reached an agreement with SAIC Motor to produce and sell Audi in China in November 2016. However, on January 18, a number of Chinese media reported that Volkswagen plans to postpone the business to at least 2018. Audi's production and sales operations in China will, in the same way as before, give priority to the joint venture contract with FAW.
"Nihon Keizai Shimbun" reported on January 19 that in order to expand sales of its premium car "Audi" in China, Volkswagen has set up the company's production and sales with Shanghai Automotive Group (hereinafter referred to as SAIC), the largest automaker in China, recently. However, it has now decided to temporarily freeze the plan. The reason is that the plan was met with fierce opposition from the 4S shop of China First Automobile Group (hereafter referred to as FAW), which has already signed an Audi business joint venture contract with the public. The public seems to have frozen the plan because of concerns about FAW's attitude.
Volkswagen reached an agreement with SAIC on the production and sale of Audi in China in November 2016. However, on January 18, a number of Chinese media reported that Volkswagen plans to postpone the business to at least 2018. Audi's production and sales operations in China will, in the same way as before, give priority to the joint venture contract with FAW.
On January 16th, Volkswagen signed a new contract with FAW for the Chinese Audi business in the next 10 years. In the future, the Huadi business will continue to be prioritized with FAW.
The background of the Volkswagen Transformation Policy is that FAW and its 4S stores, which had previously monopolized the production and sales of Audi in China, strongly oppose the signing of new contracts between SAIC and SAIC.
If SAIC also produces and sells Audi in China in the future, FAW will suffer a huge blow. FAW and SAIC belong to China's state-owned large-scale automobile manufacturers and have a competitive relationship.
However, for the public involved in fraudulent exhaust emissions scandals, Audi, which ranks first in premium car sales in China, is the largest source of revenue. The policy of cooperation with SAIC Motor to expand sales will not change, but at the moment when it is impossible to expand sales as soon as possible, the public has to make adjustments to China's strategy.
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