Chinese customers don’t buy Audi’s ‘sloppy’ apology
Insensitivity could cost carmaker sales in world’s largest auto market
Chinese customers have taken to social media to express their dissatisfaction with German carmaker Audi AG’s apology for using an inaccurate map of China that excluded parts of the country last week, with some calling the apology “sloppy” and demanding action against Audi.
“Let me make it simple: Impose fines first and then issue a warning, and if it does it again, [Audi] should get out of the Chinese market,” one Internet user commented on a report on sohu.com on Sunday, adding “there are so many cars in the world, without Audi, other brands would be happier.”
“We must make it painful for Volkswagen so it realizes what it did wrong,” another Internet user on sohu.com noted. Volkswagen AG is the parent company of Audi.
One user also claimed that a plan to purchase an Audi Q7 has been dropped after the map incident.
In a presentation at its annual press conference in Germany on March 15, Audi reportedly used a Chinese map that left out Taiwan, South Tibet and Aksai Chin, a region between Southwest China’s Tibet Autonomous Region and Northwest China’s Xinjiang Uyghur Autonomous Region, which are all integral parts of China.
After screenshots of the map circulated on Chinese social media, sparking anger and demands for an apology, Audi issued an apology on
March 16.
“This hurt the feelings of Chinese people. This was a serious mistake for which Audi wants to sincerely apologize,” the statement read, adding “this is also a profound lesson from which Audi learns.”
However, some customers in China have questioned the sincerity of the apology.
An article on sohu.com on March 16 pointed out that there are “only 86 [Chinese] characters in the statement.”
This was not the first time Audi made such a mistake. Audi also used an incorrect map during its annual conference in 2015, according to media reports.
Though the map incident is just a public relations stumble, the inventiveness on Audi’s part, along with other recent stumbles, could cause serious setbacks for Audi’s sales in China, Chinese experts noted.
Audi has already been facing sales declines in recent months in the Chinese market. In the first two months of 2017, Audi sales in China declined by 24 percent year-on-year to 67,336 units, according to a press release on March 15.
During the same period, fellow German carmaker Mercedes-Benz reported a year-on-year increase of 40.3 percent to 95,220 cars in China, while BMW posted a 14.7 percent increase to 92,045 cars, according to data from the companies.
“For a company that has operated in the Chinese market for decades, it is hard to understand how it made such a rookie mistake,” Zeng Zhiling, an analyst at Shanghai
based consultancy LMC Automotives, told the Global Times on Monday.
While this is not a major problem that will impact Audi’s car sales, it showed “Audi management doesn’t have enough sensitivity about the Chinese market,” Zeng said.
Previous stumbles
But then that’s just the latest stumble faced by Audi in the Chinese market. The Germany luxury automaker is also struggling to contain a dispute with dealers.
Existing Audi dealers in the Chinese mainland have been pushing back against Audi’s plan to create a second joint venture (JV) with China’s SAIC Motor Corp, in addition to its current JV with the FAW Group, to produce and sell cars through the JV with SAIC.
In late February, the dealers issued a joint statement that demanded Audi work with them to meet a sales target of 100 million cars by 2020 before any negotiations, the Securities Times reported on February 21.
Audi showed no sign of backing down on its plan. Joachim Wedler, president of Audi China, said in a recent interview that Audi disagrees with the Chinese dealers’ demands and the company will not persuade any dealers who want to leave, according to a report on sohu.com published on March 16.
Wu Shuocheng, a Shanghai-based independent industry analyst, said though the strategy is “not wrong per se,” the chance of success is slim given the unease among Chinese dealers.
“Few car companies have suc- ceeded in pursuing a two-partner strategy in the Chinese market,” Wu told the Global Times on Monday. “It will depend on how Audi addresses concerns among existing dealers. So far it doesn’t look good.”
Audi is also facing criticism about a sales tactic that some in China referred to as “disguised bribery.” In order to maintain its status as an “official car,” Audi gives government employees who want to buy Audi cars 1 percent to 2 percent discounts based on their official rankings, the Beijing Youth Daily reported on March 17. Such discounts are not available to ordinary costumers, it said.
Some believe that discounts violate China’s price discrimination laws, the report pointed out.
Experts said the bribery accusation is a bit exaggerated, but the recent stumbles show that Audi needs to pay more attention to the increasingly competitive Chinese market, not just in words.
Audi executives have repeatedly called China one of its most important markets.
“If Audi continues on such a path, ignoring sensitive issues among its consumers in China and making mistakes … its sales and market share in China could be hurt,” Zeng said.
Given the size and unique nature of the Chinese market, “Audi, or any foreign company, in order to operate in the Chinese market, has to learn and respect the culture and consumers here,” Wu noted.