Audi’s Rebrand in China Points to Bigger Changes in the Auto Industry

It’s besides a rejiggering for the German automaker, which entered China successful the precocious 1980s and became, acknowledgment to a concern with home shaper FAW, the archetypal planetary premium marque to accommodate its autos to the Chinese market. For galore years, Audi was synonymous with overseas luxury and aboriginal became the modular thrust of the party elite.

But the precipitous emergence of Chinese automakers, buoyed by generous authorities enactment and a caller mediate class, person near planetary automakers playing catch-up. Mitsubishi stopped accumulation successful China past year; Hyundai and Ford person closed oregon reduced operations astatine factories. This month, General Motors reported that its Chinese business, operated jointly with respective Chinese automakers, has seen income autumn by astir 20 percent this year. GM said it would restructure its concern successful the country, taking a $5 cardinal write-down successful the process.

The Volkswagen Group, which sells Audis and besides Porsches, Bentleys, Škodas, and Lamborghinis successful China, has seen a 10 percent dip successful vehicles sold successful the state this year. The drop was responsible, successful part, for planetary income retraction that led to a autumn successful profits past quarter. Volkswagen said last week it would merchantability disconnected a works successful Xinjiang.

Still, arsenic Ahuja points out, Audi has sold much than 9 cardinal vehicles successful China. It wants to enactment successful the country. AUDI—no rings!—is an effort to bash so. (Perhaps confusingly, the automaker volition proceed to merchantability autos successful China nether the practice “four ring” marque arsenic well.) “I don’t privation to interaction that legacy,” says Ahuja. “I privation to germinate it further.”

The marque tweaking besides points to deeper dynamics successful the Chinese market, wherever planetary automakers good beyond Audi (or AUDI) are scrambling to support a toehold among a caller procreation of car buyers arsenic Chinese-made autos soar astatine home—and abroad. And it points to shifting dynamics successful user preferences that person already shown up connected roads good extracurricular the Asian country.

Back successful 2019, BMW was defending its determination to spell large with its 7-Series kidney grilles. At the time, BMW radical plan manager Adrian von Hooydonk cited 1 crushed for the huge, imposing beforehand ends was a “younger and much extroverted” China customer. He besides went connected to accidental that the grilles would shrink back arsenic "I perceive from [BMW's Shanghai Design Center] that plan tastes successful China are processing rapidly … they are progressively calling for subtlety.”

Brand Translations

For one, Audi’s determination to nix the 4 rings is practical. Logos similar Audi’s 4 rings “are precise hard to support successful China, from an intelligence spot perspective," says Jeff Lee, a cofounder and spouse astatine Northern Light Venture Capital, an early-stage Chinese steadfast with offices successful Silicon Valley. “It’s truly casual to usage 5 rings oregon 3 rings. And past determination are hundreds of Chinese automakers. People conscionable get confused.” It helps that “AUDI” is casual to pronounce to Chinese speakers.