In 2022, when the epidemic is counterattacking, the global economic situation is not optimistic. Coupled with the rise in oil prices, the thinking of many customers who buy cars has begun to change, and new energy vehicles have become the choice of more people.
It is this change of concept that has quietly changed the global auto industry pattern: in 2021, the annual sales of domestic new energy vehicles will exceed 3.5 million units, a year-on-year increase of 157.8%.
In the context of the rapid changes in the market structure and the continuous rise of new energy vehicle companies, fuel vehicle companies are facing huge crises and important choices.
As strong as Audi, we also need to think about whether we should continue to maintain our traditional advantages, or actively embrace market changes and compete with the giants of new energy vehicles?
Crisis lurking under high revenue
According to the automobile sales data in the first half of the year in the domestic market, from January to July, the retail sales of new energy passenger vehicles reached 2.733 million units, and the market share rose to 24.7%. That is to say, for every 4 vehicles sold, there is 1 new energy vehicle. Compared with the new energy passenger vehicle market share of 14.8% in 2021 and 5.8% in 2020, its growth rate is obviously accelerating, and fuel vehicles are withdrawing from the market . It seems only a matter of time.
As a century-old luxury car brand, Audi has obviously not paid attention to this crisis that has come.
At the end of 1995, Audi officially entered China as a subsidiary of German Volkswagen, and FAW-Volkswagen Audi came into the world. This is Audi’s first joint venture in China. FAW, Volkswagen, and Audi have reached a cooperation agreement, with FAW holding 60%, Volkswagen holding 30% (currently, Volkswagen holding 20%, Volkswagen China holding 10%), and Audi holding 10%.
Since it officially entered the Chinese market, Audi has been well known by the Chinese as the earliest luxury car brand among imported cars.
In 2021, Audi achieved the milestone of cumulative sales in China exceeding the 7 million mark, accounting for 42% of its total sales, becoming the first domestic luxury car brand to achieve this achievement.
Undoubtedly, the Chinese market is still Audi’s largest and most important sales market.
At the end of 2020, SAIC Audi (a joint venture established by Audi and SAIC Group) was born.
After FAW, the cooperation with SAIC means that Audi has become the first high-end car brand to join hands with two local partners, resulting in its financial data reaching a new high.
According to Audi’s 2021 financial report, sales revenue is about 53 billion euros, operating profit is 5.5 billion euros (about 39.276 billion yuan), operating sales profit margin is 10.4%, and net cash flow reaches 7.757 billion euros (about 55.393 billion yuan). Operating profit and net cash flow both set new records in the transformation.
And behind the beautiful data, the hidden crisis is gradually expanding.
The other two Mercedes-Benz and BMW of the “BBA” German luxury car entered the Chinese market after China joined the WTO, that is, after 2001, more than ten years later than Audi, but in recent years, their sales have been far behind. Super Audi.
According to the data, in the Chinese market in 2021, BMW will sell 846,237 vehicles, an increase of 8.9% over 2020, surpassing Mercedes-Benz’s 785,863 vehicles, a decrease of 2.0%, and will continue to maintain the number one position after 2020. Audi, in third place, saw sales drop 3.6 percent.
The catching up of traditional car companies may bring Audi down, but it is far from causing a major crisis.
Audi’s real crisis comes from the fast-rising new energy car companies.
The long overdue e-tron
Faced with changes in the overall market pattern, Audi is not completely inactive.
As early as 2019, Audi Group executives said that by 2021, the number of electric models sold in China will exceed 9; by 2025, all products sold by Audi in China will be electrified.
Audi appears to be strategically focused on electrification, but its behavior is arrogant and inattentive.
Up to now, Audi only has four pure electric models in China: Audi e-tron (including imported and domestic versions), Q2L e-tron, Q4 e-tron, and Q5 e-tron, of which the latter two are still within the past year. Models just released.
A comprehensive comparison of these models shows that not only are the prices relatively high (e-tron subsidized prices are as high as 692,800-828,600 yuan, and Q2L e-tron subsidized prices range from 226,800 to 237,300 yuan), but in the case of higher average prices It is also at a disadvantage in terms of cruising range, acceleration from 100 kilometers, and intelligence.
In order to reverse this situation, Audi cooperated with FAW to replace the ternary lithium battery pack from the Ningde era, and localized the e-tron in the form of component assembly, with a price of 546,800 yuan to 648,800 yuan. The battery life has shrunk seriously, and the power consumption index for 100 kilometers is so amazing that some media call it “the largest electric car in the market”.
In terms of sales, it is even less satisfactory.
In 2021, the annual sales of domestic new energy vehicles will exceed 3.5 million units, of which BYD’s sales performance is far ahead, and its market share is close to one-third. The competition for the second and third places is very fierce. SAIC-GM-Wuling has 325,000 vehicles, of which Hongguang MINIEV is the number one contributor.
Tesla ranks third with 318,200 vehicles. Its Model Y has few rivals in the new energy SUV market, and the capital behind it is huge. The combined market value of the three BBA car companies is still less than one-third of Tesla’s. one.
At the same time, Weilai, Xiaopeng, Geely Automobile, GAC Aian, Chery, Changan, Nezha, and Ideal Automobile, etc., their sales are basically around 100,000.
The total sales volume of new energy models delivered by Audi in the Chinese market is 9,713 units. In the same camp, Mercedes-Benz’s new energy models sold 14,483 units; BMW (including MINI) sold more than 48,000 new energy models in China, and Audi was at the bottom.
At the same time, Aian, a subsidiary of GAC, is also expected to complete the listing on the Science and Technology Innovation Board with the help of the two-wheel drive of industry and capital, becoming the “first stock of new energy vehicles” on the Science and Technology Innovation Board, and also hopes to truly become a leader in China’s new energy vehicle manufacturing industry. a solid force.
Previously, Weilai, Ideal and Xiaopeng had already achieved U.S. stock market listings. Among them, NIO’s sales market is limited to NIO in Norway and China. In this market, in the first quarter of 2022 alone, NIO delivered 25,768 vehicles. Audi’s global sales of pure electric vehicles, which are in transition, are only 24,236 vehicles, such data obviously makes the giant Audi uneasy.
In the face of fierce competition, Audi had to file a lawsuit for trademark rights, and a lawsuit brought NIO to court, mainly because NIO’s ES6 and ES8 infringed or involved infringement of S6 and S8 trademarks. Of course, no matter what the result is, it still cannot change Audi’s current “stall” situation in the new energy market.
Audi may have lost its ‘trump card’
Of course, with its strong brand appeal and product capabilities, it is not a big problem for Audi Group to continue to maintain high profits for fuel vehicles in the next few years. It is obviously impossible to reverse the trend of “strategic mistakes” with the electric transformation like “turning around”, especially with the Q5 e-tron.
Audi’s stalled electrification transformation is mainly due to its strategic misjudgment of the arrival of the wave of vehicle electrification.
In the final analysis, the survival and development of enterprise automobiles is also a game of probability, one trades off the other, especially in a market with limited market, that is, there is no invincible victorious general, and no everlasting enterprise, and in this jungle of enterprises In , updates and iterations are also common.
And a company that can continue to maintain stable cash flow must choose the right track and have its own strategic system. The current reality is that new energy vehicles are gradually replacing fuel vehicles at a speed visible to the naked eye.
Even a giant company like Audi is no exception. Due to its lack of three-electric technology + digital capabilities, it has to rely on the supply chain, and it lacks talents who can integrate all modules into the integrated software at the system level, resulting in software development progress. Repeated twists and turns have greatly affected and delayed its transformation, and the Audi FAW PPE platform will be a key step for Audi to accelerate electrification.
The smart electric vehicle qualifying competition has just begun, and whether Audi can get a chance to sit at the poker table will depend on the next few years.
In this regard, Audi CEO Marcus Duesmann’s plan is that by 2025, Audi plans to provide Chinese customers with five domestically produced pure electric models; from 2026, only electric vehicles will be introduced to the market. All Audi models will be purely electric by 2035.
Sure, strategy is something to look forward to, but whether it matches action is another matter.