Volkswagen Ag’s luxury division Audi has decided to ditch a threshold of 600,000 sold units for the year in China, its largest single market, as the country’s stock market collapse has impacted premium auto demand, said two sources.
According to the people that have knowledge of the company’s strategy, the German automaker will deliver a refreshed take on the Chinese market situation during the conference call on half-year results scheduled for July 30, said the sources, who opted to remain anonymous because the information is not yet of public knowledge. Audi’s sales in China soared 1.9 percent to 273,853 units during the first six months of the year. The brand back in April during the Shanghai auto show forecasted its sales could cross the 600,000 unit threshold for the first time ever in China in 2015. Last year the luxury unit had total sales, including Hong Kong, of 578,932 autos. But the Chinese market has seen a slowing economic growth – the weakest in 25 years – and the recent stock market collapse scared consumers. British luxury competitor Jaguar Land Rover on Tuesday opted to lower prices in China and also cut its sales goal for the year.
Audi is the second largest luxury automaker in the world but has held the No.1 spot in China for years, while being the largest contributor in terms of profit for its parent, Volkswagen AG. China, where for the first time in at least two years total demand was negative in June, is a crucial market for Audi’s plans to overcome BMW AG for the world title in the luxury field – a feat envisioned for the end of the decade.