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May 22, 2017

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Audi fixes feud with new deal

AUDI, a unit of Volkswagen, has struck a deal with its dealers in China, effectively resolving a dispute that could have disrupted the luxury carmaker’s business in the world’s biggest auto market.

The dispute stemmed from Audi’s tie-up with SAIC Motor Corp, China’s largest automaker, for a long-term collaboration that could include the production and distribution of Audi models in the future.

The tie-up riled Audi store operators in China, which currently sell Audi cars imported from Germany as well as Chinese-made vehicles as part of Audi’s existing joint venture with China’s FAW Corp.

They said the partnership would cause current dealers to lose out to SAIC on access to key future products, hurting their sales and profitability.

Audi, however, said over the weekend that it signed an agreement with China’s FAW, the FAW-Volkswagen joint venture and the Audi dealer council based on “a common understanding of how the planned cooperation between SAIC and Audi will meet the interests of all parties involved.”

“It paves the way for our two-partner strategy and will allow us to further strengthen our commitment to China,” Audi board member Dietmar Voggenreiter said in a statement.

Under the accord, Audi models from a potential partnership with SAIC will be distributed via the carmaker’s existing sales network in China.

Based on a 10-year growth plan of Audi, FAW and FAW-Volkswagen, Audi will expand its portfolio of locally made and imported models in China, the statement added.

An early entrant to China, Audi is the best-selling premium car brand although it is losing ground to newer models from Daimler’s Mercedes-Benz and non-German automakers such as Toyota’s Lexus and General Motors’ Cadillac.


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