– Audi global CEO Gernot Döllner (高德诺) has firmly denied market speculation about merging its partnerships with FAW (一汽) and SAIC (上汽), emphasizing the strategic benefits of the current dual setup.
– The automaker is deepening collaboration with SAIC on the new ‘AUDI’ brand for China’s EV market, with the E5 Sportback launched and more models like the E7X slated for 2025-2026.
– Despite global challenges including trade barriers and electrification slowdowns, Audi is streamlining operations and diversifying supply chains to boost efficiency and resilience.
– Financial performance for 2025 showed modest revenue growth but profit pressure, with a target of 6%-8% operating margin for 2026 driven by new model launches.
– Audi’s future in China hinges on tailored products, including PPE-based EVs with FAW and tech collaborations like with Huawei (华为), underscoring its adaptive strategy in a competitive landscape.
Audi’s Firm Rejection of Merger Speculation
In a clear response to swirling market rumors, Audi’s global CEO Gernot Döllner (高德诺) has categorically dismissed the possibility of consolidating the company’s two major Chinese joint ventures. Speaking to Yicai (第一财经) on March 17, Döllner stated that the current cooperation model with both FAW (一汽) and SAIC (上汽) is highly beneficial for Audi, and the brand will steadfastly maintain its dual partnership strategy. This declaration puts to rest conjecture about a potential ‘north-south Audi merger,’ which had gained traction amid industry consolidation trends. For global investors, this reaffirmation signals stability in Audi’s China operations, a critical market that accounts for a significant portion of the group’s global sales.
Strategic Rationale Behind the Dual Approach
Audi’s dual partnership strategy in China is not a mere legacy structure but a calculated maneuver to maximize market coverage and resource synergy. With FAW, Audi has built a deep-rooted presence over decades, focusing on premium sedans and SUVs under the four-ring logo. Conversely, the newer partnership with SAIC targets innovative, China-specific electric vehicles under the ‘AUDI’ lettered brand. This bifurcation allows Audi to cater to diverse consumer segments—traditional luxury buyers and tech-savvy EV adopters—simultaneously. Döllner emphasized that this approach enables localized agility, as seen in the rapid development of the AUDI brand platform, which is the first dedicated new energy vehicle (NEV) platform for China by a luxury automaker. Maintaining this duality is central to Audi’s competitiveness as it navigates the complex regulatory and consumer landscape of the world’s largest auto market.
Deepening Collaboration with SAIC: The AUDI Brand Initiative
Audi’s partnership with SAIC (上汽) is entering a pivotal phase, centered on the ‘AUDI’ brand designed exclusively for Chinese consumers. Döllner noted that dialogues with SAIC are positive and progressing, with updates to be shared in due course. The AUDI brand, though in its infancy, is a cornerstone of Audi’s electrification push in China, aiming to build brand awareness and a robust product lineup. This focused collaboration underscores Audi’s commitment to tailoring offerings for local preferences, a key aspect of its dual partnership strategy in China.
Product Roadmap and Market Rollout
The first model under the AUDI brand, the E5 Sportback, hit the market in the second half of 2025. Looking ahead, Audi plans to launch the E7X in 2025 and an additional model in 2026, accelerating its NEV portfolio. These vehicles are developed on a dedicated platform, emphasizing connectivity and autonomous features favored by Chinese buyers. By leveraging SAIC’s manufacturing prowess and market insights, Audi aims to capture share in the premium EV segment, where domestic brands like Nio (蔚来) and Li Auto (理想汽车) are gaining ground. This initiative is a tangible example of how Audi’s dual partnership strategy in China allows for specialized, rapid innovation without diluting the core brand equity managed with FAW.
Strengthening Ties with FAW: PPE and PPC Platforms
On the other front, Audi’s collaboration with FAW (一汽) remains robust, focusing on expanding both electric and internal combustion engine (ICE) vehicles. The partnership is centered on the Premium Platform Electric (PPE) for pure-electric models and the Premium Platform Combustion (PPC) for enhanced燃油车 (fuel vehicles). This dual-platform approach ensures that Audi can address the transitional phase in China’s auto market, where EV adoption is growing but ICE demand persists in certain segments. By concentrating on the four-ring奥迪 (Audi) products with FAW, the company maintains its premium heritage while integrating advanced technologies.
Localization and Tech Partnerships
Global Headwinds and Strategic AdjustmentsLike its peers in the German premium trio—Audi, Mercedes-Benz, and BMW (often referred to as ABB)—Audi faced significant challenges in 2025, with revenue and profit declines amid a painful electric transition. Döllner acknowledged that the company has undertaken sweeping internal restructuring to streamline organizations, clarify priorities, and reduce management layers for faster decision-making. These efficiency drives are essential as geopolitical tensions and trade barriers, such as U.S. tariffs that cost Audi €1.2 billion in 2025, squeeze margins. The firm is also diversifying its supply chain to lower dependencies, though current operations remain unaffected by Middle East volatilities.
Financial Performance and 2026 Outlook
Future Product Launches and Market StrategyAudi has embarked on its largest-ever global product offensive, with 2025 marking the start and 2026 set to see eight new models in China alone. These include the flagship SUV奥迪Q9 (Audi Q9), the compact electric奥迪 A2 e-tron (Audi A2 e-tron), and updates like the奥迪Q5L (Audi Q5L) and奥迪A6L e-tron (Audi A6L e-tron). The AUDI brand will also unveil its second production model, the奥迪E7X (Audi E7X). This aggressive rollout is designed to reinvigorate sales and strengthen Audi’s position in a market where luxury EV penetration is accelerating.