Audi ramps up new 1b yuan plant

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By Gong Zhengzheng (China Daily)
Updated: 2009-07-27 11:38

German luxury carmaker Audi AG, owned by Volkswagen Group, plans to open a new 100,000-vehicle assemble plant in September in China to meet growing demand in the world's biggest auto market.

The 1 billion yuan plant in the northeastern city of Changchun will double Audi's production capacity to 200,000 units a year, according to Zhang Xiaojun, executive deputy general manager of the Audi Sales Division at Sino-German car joint venture FAW Volkswagen Automobile Co Ltd.

In an interview with China Daily, Zhang said "the new factory is Audi's optimum assembly plant globally which in theory will be able to produce all Audi models".

The first two models to roll off the new assembly line will be the Audi A4L sedan and Q5 SUV, he said.

The A4L is now made at an existing 100,000-unit factory in Changchun that also produces the Audi A6L sedan. Production of the Q5 will begin at its new plant at the end of this year.

Audi continues to dominate the luxury car segment. [China Daily]

The new facility is seen as a strategic move by Audi, the biggest premium carmaker in China, to meet its sales target of 200,000 vehicles annually by 2015. It sold nearly 120,000 vehicles last year.

Audi's sales in its No 2 global market for the first half of 2009 grew by 10.4 percent from a year ago to 66,131 vehicles, some 42 percent of sales in China's luxury vehicle segment. Its market share is much larger than German rivals BMW, which has 23 percent, and Mercedes-Benz at 17 percent.

Zhang declined to reveal a sales target for Audi in China for the full year, but he said the automaker will be able to maintain its market share as overall premium vehicle sales reach 330,000 units this year.

"We have confidence that we will keep our leadership this year and in the years to come through our new products, improvements in services and branding," he said.

Audi became the first premium global brand to make cars in China when it started local production in the early 1990s.

BMW began production at a plant in the northeastern city of Shenyang in 2003. The facility now has an annual capacity of producing 41,000 units.

Mercedes kicked off production in Beijing in 2005. It now plans to ramp up capacity from 30,000 units to 80,000 in the near future.

Industry research company JD Power predicts that sales of luxury vehicles in China will hit 600,000 units a year by 2015, about 90,000 more than the combined sales of the next 10 largest luxury vehicle markets in Asia, including Japan and South Korea.

Audi's Zhang said the brand will introduce eight all-new and upgraded models in the second half of this year, including the locally made A4L 1.8TFSI AND 2.0TFSI, the A6L 2.7TDI and the Q5 2.0T as well as the imported Q5 3.2, Q7 3.0TDI, Q7 V12TDI and R8 5.2FSI Quattro.

It will be Audi's most intensive introduction of new models since it arrived in China, part of an effort by the brand to better tailor its products to local demand and meet increasing competition.

The carmaker said it will also aggressively expand its sales network, increasing the number of authorized dealerships to more than 210 in 100 Chinese cities before 2012.

Audi currently has 146 dealerships on the mainland, most of them in first-tier cities such as Beijing, Shanghai and Guangzhou. Zhang said the number will surpass 150 by the end of this year.

"We are also considering extending our networks in second, third or even fourth-tier cities as their economies are growing very rapidly," he said.

Audi is also building more so-called "Terminal" showrooms in China styled like airport hangars that will be the global architectural hallmark of its brand.

The number of these "Terminal" showrooms will exceed 30 next year, up from 13 at present.

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