Audi Pushes Ahead on Second China JV as Dealer Protest Eases

Volkswagen AG’s Audi unit is moving ahead with plans to launch a second carmaking venture in China in spite of protests by its existing dealer network there.

Audi and SAIC Motor Corp. announced their intended joint venture last month. The plan prompted a threat to stop ordering new cars on Dec. 1 by dealers who sell Audi models made by the carmaker’s existing venture with China FAW Group. That partnership assembles Audi’s A3 small sedan, long-wheelbase A4 and A6 midsize sedans and Q3 and Q5 midsize crossover vehicles.

The dealers feared their profits would be hurt by a second Audi retail network in China. They withdrew the threatened embargo last week after the carmaker assured them their interests would be considered during the expansion, Automotive News China notes.

The proposed Audi-SAIC venture plans to build unspecified Audi models—including hybrid and electric variants—and import certain undisclosed Audi vehicles. Audi is China’s best-selling luxury brand. But its sales 6% growth rate in January-October trailed that of rivals BMW (+10%) and Mercedes-Benz (+29%).