Audi Global CEO Gernot Döllner (高德诺) has explicitly denied speculation about consolidating its partnerships with FAW (一汽) and SAIC (上汽) in China, reaffirming the value of its dual-partner strategy.
The collaboration with SAIC centers on the new energy-focused ‘AUDI’ brand, with models like the E5 Sportback and upcoming E7X, while the FAW partnership focuses on expanding the core Audi lineup with PPE-based EVs and PPC-based ICE vehicles.
Facing a 2025 profit squeeze amid global electrification pains, Audi has implemented internal restructuring and cost-saving initiatives to improve efficiency.
The company is embarking on its largest-ever product rollout, with key models such as the Q9 SUV and A2 e-tron, and plans eight new China launches in 2026.
External challenges including U.S. tariffs cost Audi €1.2 billion, but the group forecasts a rebound to 6-8% operating margin in 2026.
Audi’s Firm Commitment to Dual-Partnerships in China
In a definitive statement to First Financial News, Audi’s global chief executive Gernot Döllner (高德诺) has quashed persistent market rumors regarding a potential merger of its northern and southern Chinese joint ventures. This move underscores Audi’s commitment to its dual-partner strategy in China, a critical market where the luxury automaker navigates fierce electric vehicle competition and evolving consumer preferences. With partnerships spanning decades with FAW (一汽) and a newer, strategic alliance with SAIC (上汽), Audi is betting on a differentiated approach to capture diverse segments of the world’s largest auto market. As the industry grapples with transformation, Audi’s stance offers a clear signal to investors about its strategic priorities and resilience.
Denial of Merger Speculation
Döllner directly addressed the rumors, stating, ‘The current cooperation model with our two partners is greatly beneficial to Audi,’ and confirmed the company will adhere to its existing dual-partner strategy. This firm rejection highlights the strategic importance of maintaining separate collaborations with FAW and SAIC, rather than consolidating them into a single entity. Market whispers had suggested that SAIC Audi might be absorbed into the larger FAW Audi operations to streamline costs, but Döllner’s comments emphasize the benefits of the current setup for flexibility and market coverage.
Strategic Rationale Behind the Dual Approach
The dual-partner strategy in China allows Audi to leverage distinct strengths: FAW’s deep manufacturing expertise and brand heritage, and SAIC’s innovation in electric vehicle development. This approach enables tailored product strategies for different consumer segments and regulatory environments. By avoiding over-reliance on one partner, Audi mitigates risks and enhances its ability to respond to rapid market changes. The dual-partner strategy in China is not just about maintaining two joint ventures; it’s a calculated move to maximize reach and innovation in a hyper-competitive landscape.
Divergent Collaborations: SAIC’s AUDI Brand vs. FAW’s Core Lineup
Audi’s partnerships in China are strategically diverged, each serving unique purposes in the brand’s overall market offensive. The collaboration with SAIC focuses on pioneering electric vehicles under the new ‘AUDI’ brand, while the alliance with FAW drives the expansion of the traditional Audi portfolio. This bifurcation is key to Audi’s plan for dominating both the emerging EV space and the established luxury segment.
The SAIC Partnership and the ‘AUDI’ EV Brand
Launched in May 2024, the ‘AUDI’ brand represents Audi’s first luxury marque dedicated exclusively to the Chinese market for new energy vehicles. Döllner noted that the brand is still in its infancy, with efforts centered on solidifying its foundation, enhancing awareness, and perfecting the product lineup. The first model, the E5 Sportback, debuted in late 2025, followed by the E7X this year and another model in 2026. This brand aims to tap into China’s booming EV demand with locally tailored designs, showcasing Audi’s adaptability through its dual-partner strategy in China.
FAW Alliance and Product Expansion
Conversely, the partnership with FAW focuses on the core four-ring Audi badge, with product development based on the Premium Platform Electric (PPE) for pure electric vehicles and the Premium Platform Combustion (PPC) for fuel-powered models. This collaboration ensures a robust lineup of vehicles like the Audi Q5L and A6L, with plans for more China-specific features. Notably, Audi is collaborating with Huawei through this partnership to integrate advanced connectivity, highlighting the dual-partner strategy in China as a conduit for local tech integration. Future models will include tailored functions for Chinese consumers, reinforcing Audi’s commitment to localization.
Navigating Financial Headwinds and Electrification Pains
The broader context for Audi’s strategy is a challenging global automotive environment, where electrification transitions and geopolitical uncertainties are pressuring profits. Along with peers Mercedes-Benz and BMW, Audi experienced declines in revenue and profit in 2025, prompting cost-saving measures and strategic adjustments.
2025 Financial Performance and External Challenges
Audi Group’s 2025 financial results show a slight revenue increase to €65.5 billion, but operating profit dropped to €3.4 billion from €3.9 billion in 2024, yielding a 5.1% margin. Global CFO Jürgen Rittersberger (李博睿) cited multiple external challenges: political uncertainties, rising trade barriers, intensified competition, and slower-than-expected EV adoption in some regions. A significant €1.2 billion expense from U.S. tariffs alone eroded nearly 2% of the sales return rate, underscoring the volatility faced by multinational automakers. For detailed financial reports, refer to Audi’s official investor relations page.
Internal Restructuring for Efficiency
In response, Audi has undertaken what Döllner called ‘drastic adjustments’ to its internal architecture. The company is implementing a new strategy to create a leaner organization, clarify priorities, streamline management levels, and shorten decision processes. These efficiency drives are essential for sustaining the dual-partner strategy in China amid cost pressures, ensuring that resources are allocated effectively to both partnerships. By reducing bureaucratic overhead, Audi aims to enhance agility in a fast-moving market.
Aggressive Product Offensive and China Roadmap
Despite financial pressures, Audi is launching its largest-ever product offensive globally, with a focus on key models for China. This ambitious plan signals confidence in the dual-partner strategy in China and aims to rejuvenate the brand’s market presence through innovation and volume.
Global Launch Highlights
For 2025 and beyond, Audi’s global rollout includes highlights like the new flagship SUV Audi Q9 and the compact electric model Audi A2 e-tron. These vehicles are designed to compete in high-growth segments and strengthen Audi’s position in the luxury market. The product offensive, described as historic, reflects Audi’s commitment to refreshing its lineup amid the EV transition.
China-Specific Models for 2026
In China, Audi plans to launch eight new models in 2026, including the Audi Q5L, A6L, A6L e-tron, and the AUDI brand’s second mass-produced model, the E7X. This aggressive schedule underscores the importance of the Chinese market and the role of the dual-partner strategy in China in delivering tailored products. By leveraging both partnerships, Audi can address diverse consumer preferences, from traditional luxury sedans to cutting-edge EVs, ensuring comprehensive market coverage.
Building Resilience Against Geopolitical and Supply Chain Risks
In today’s volatile global landscape, Audi is not only focusing on products but also on fortifying its operations against external shocks. Geopolitical tensions and trade wars have necessitated a re-evaluation of business models and supply chain strategies.
Adapting to Trade Barriers and Tariffs
The impact of U.S. tariffs, costing Audi €1.2 billion in 2025, is a stark reminder of how trade policies can affect profitability. Döllner acknowledged that political uncertainties and trade barriers are increasing, affecting business operations. In response, Audi is diversifying its supply chain and exploring local sourcing options to mitigate dependencies. This adaptability is crucial for the success of the dual-partner strategy in China, as it ensures continuity in production and distribution despite external pressures.
Supply Chain Diversification Efforts
Döllner noted that Audi has re-examined its business model to diversify its supply chain, reducing reliance on single regions. While the current supply chain remains unaffected by Middle East tensions, these proactive measures enhance resilience. For investors, this focus on risk management complements the strategic benefits of the dual-partner strategy in China, offering a more stable foundation for long-term growth. Monitoring Audi’s supply chain announcements can provide insights into its operational robustness.
Audi’s clear denial of merger rumors reaffirms its strategic path in China. The dual-partner strategy in China, with distinct roles for FAW and SAIC, provides a balanced approach to capturing market share in both traditional and electric vehicle segments. While financial pressures from electrification and geopolitics persist, Audi’s internal restructuring, product offensive, and supply chain diversification position it for a potential rebound in 2026, with forecasts of 6-8% operating margin. For investors and industry watchers, monitoring the execution of this strategy—particularly the rollout of China-specific models and collaboration with tech firms like Huawei—will be key to assessing Audi’s competitiveness in the evolving automotive landscape. Stay informed on further developments by following official Audi announcements and market analyses for actionable insights.