Bavarians fight over Chinese market

Ingolstadt. Audi AG aims to keep its pole position in China's premium car sector ahead of BMW by expanding its dealer network.

Audi has set aggressive sales targets for China.

"In 2002 we sold approximately 37,000 cars in China -- we are hoping to double this by 2005," said Erich Schmitt, sales director at Audi and responsible for the Chinese market.

The first quarter of 2003 was very promising. Audi increased its sales in China to 12,165 vehicles, which is 85 percent more during the same period in 2002. The target is to build 50,000 cars in the plant in Changchun in 2003: 42,000 A6 models and 8,000 A4s.

To date Audi has only built a long version of the A6 in a joint venture with the parent company VW Group and local automobile manufacturer FAW.

A week ago Audi launched the A4 in the Chinese market, which is also being manufactured locally. Schmitt hopes that by 2005 at the latest some 30,000 A4s will be produced in Changchun.

"The decision to build the A4 in China is due to the positive market development and has nothing to do with BMW," Schmitt said.

By the middle of this year the rival from Munich plans to start production of the A4's competitor, the BMW 3 Series, in Shenyang, China. By spring 2004 BMW will also have launched the 5 Series, the competitor to the A6.

Schmitt said he is more concerned about his own plant in Changchun than the Bavarian competitor:

"We are now operating at total capacity," he said.

The VW group is considering building a new plant in China and a final decision will be made by the middle of the year.

Schmitt aims to "defend and strengthen" Audi's leading position in China, where it currently holds more than 50 percent of the premium car market. This is why within the next 12 months the current dealer network of 57 dealers will increase by 50 percent.

However, BMW plans to take over leadership of the Chinese market. Its aim is to "become the No. 1 premium brand for private customers," said group CEO Helmut Panke. BMW Asia boss Lueder Paysen remarked that to the Chinese Audi automobiles are not premium cars but no more than government vehicles.

Schmitt's reply: 70 percent of A6 buyers are private customers and government sales are only 30 percent.

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