Audi AG backtracks on full year delivery guidance due to China woes image

Germany’s Audi, the second largest luxury automaker in the world, has announced it would cut down on its global delivery target for 2015 because of sliding demand in China, the world’s biggest auto market and the make’s largest market.

Volkswagen AG’s top automotive division announced Thursday it predicts sales for the full year to grow 3 to 4 percent from the record tally of 1.74 million units delivered last year. Just two months ago, Audi was still bullish about an important increase throughout the year in terms of worldwide sales – which at the time would have corresponded to a surge between 5 and 9.9 percent. Ingolstadt-based Audi has fallen in line with its parent, Volkswagen Ag, today the interim worldwide auto industry leader in terms of sales volume after the first six months of the year. Volkswagen on Wednesday decided to lower its China sales expectation and even warned about the probability of sliding profit from its two joint ventures in the world’s largest car market.

According to group sales boss Christian Klingler, who talked to media representatives during a financial report conference call, China, which eats up around a third of Audi’s 902,400 six-month worldwide sales, will become “a bumpy road in the next few months”. In other related news, Audi announced it had a 9.1 percent increase for its first half operating profit, thanks to surging sales across the high-revenue European market. Additionally, the company said its earnings results had been clouded by the expenses incurred with new model launches such as the new-generation Q7 sport utility vehicles and A4 midsize model lineup.

Via Reuters