Audi in China
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Case Code: BSTR431 Case Length: 16 Pages Period: 1988-2012 Pub Date: 2013 Teaching Note: Not Available |
Price: Rs.500 Organization: Audi, Volkswagen Industry: Automobile Countries: China Themes: International Business, Globalization |
Abstract Case Intro 1 Case Intro 2 Excerpts
Excerpts
Audi in China
In 1986, Audi contacted FAW for the conduct of a feasibility study on the development of automobile related technologies. For the next two years, several technical development projects were carried out and in 1988, Audi and FAW entered into a contract for technology transfer for production and planning of the Audi 100 and setting up of after sales support. Around 500 workers from China were trained at Audi's facilities in Germany and around 30 employees were posted at FAW's plant in Changchun. In 1988, about 499 units of the Audi 100 model were rolled out from the plant...
Audi's Strategies in China
According to McKinsey's Report on China's premium car market, China was the second largest luxury car market next to the US. During 2012, the Chinese purchased 1.25 million premium cars and the average price of the each car was US$ 32,144. The report also found that the Chinese with an average annual income of US$ 16,074 were keen on purchasing a basic luxury car. Based on the growth statistics, McKinsey expected China's luxury automobile market to reach 2.25 million units by 2016 and 3 million units by 2020. It also reported that China might surpass the US as the world's largest consumer of luxury cars by 2016.
McKinsey's survey also reported that 80 percent of China premium luxury car segment was dominated by German manufactures BMW , Audi, and Mercedes Benz . Of the trio, Audi was the top player. In 2012, Audi's market share in the premium car segment in China was 29.6 percent followed by BMW (23.6 percent) and Mercedes Benz (20.6 percent).....
Looking Ahead
In a survey conducted by J D Power, China, Audi had recorded the highest levels of customer satisfaction. The survey reported that Audi had delighted its customers in the areas of sales dialogue, customer care, after-sales service, and the delivery process.
To continue its successful run in China, and maintain its position and brand image, Audi came up with a blueprint — 'Leadership Strategy' for 2020. The strategy aimed at making Audi the most appealing brand in the country. Audi planned to increase annual production in China to 700,000 units by 2015. By then, it planned to have 42 variants. It also estimated that by then, the market for luxury cars in the country would reach 2.38 million units...
Exhibits
Exhibit I: Premium Automobiles in China
Exhibit II: Audi China Dealership Units
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