Image source: Dugou

Photographed at the Shanghai Auto Show in April 2023

Is an Audi without the four-ring logo still an Audi? Will people still buy it?

According to recent foreign media reports, the new electric vehicle models jointly developed by Audi and SAIC Motor will feature a new logo, forgoing Audi's iconic "four rings" emblem. This decision was made out of concerns for brand image.

The media outlet reported that Audi declined to comment on these rumors, while SAIC Motor stated in a press release that the new vehicles will be "genuine Audis with authentic Audi DNA."

It's worth noting that rumors had previously circulated that the new electric vehicles jointly developed by Audi and SAIC would adopt an independent logo, featuring the "Audi" nameplate instead of the four rings. However, these rumors have yet to be confirmed by official sources.

CarVisibility believes that if this news is true, it would be a bold move. BBA brands have not fared well in the electric vehicle sector, often being ridiculed as "knock-offs." Thus, changing the logo for brand image reasons is understandable. However, many consumers do consider the brand logo when purchasing a car, and the absence of the classic four rings may significantly reduce its appeal.

1

● A Turbulent Collaboration Journey

According to sources, Audi's collaboration with SAIC Motor began in 2016. In November of that year, a photo emerged online showing Audi and SAIC signing a memorandum of understanding for a joint venture in Wolfsburg, Germany. However, this triggered opposition from FAW-Volkswagen Audi dealers, who threatened to stop taking deliveries and demanded negotiations with Audi.

To appease dealers, Audi had to compromise and announced a temporary suspension of its cooperation plans with SAIC Motor. Fortunately, both parties had a strong desire to collaborate, and after lengthy negotiations, FAW Audi dealers eventually agreed not to oppose the partnership after achieving a sales target of 1 million vehicles by 2020.

In May 2017, Audi dealers' association, FAW, FAW-Volkswagen, and Audi reached a consensus and signed an agreement committing to ensuring sales of 900,000 vehicles by 2022. The agreement also stipulated that no third-party company could sell vehicles in China before January 2022.

It was also agreed that a single sales company would manage the dealer network and define network standards in China, with existing Audi dealers receiving authorization from this sales company. Additionally, all Audi products sold and serviced in China would be provided through current FAW-Volkswagen Audi dealerships and service areas.

After lengthy negotiations and under these restrictions, the SAIC Audi project finally progressed. In June 2018, SAIC Motor revealed that Volkswagen Group had transferred 1% of its shares in SAIC Volkswagen to Audi, enabling SAIC Volkswagen to produce and sell Audi products.

This hard-won collaboration was seen as a "two-way journey," with Audi seeking to expand its luxury market share in China through alternative partnerships and SAIC aiming for new breakthroughs in the luxury auto market. Both parties had high expectations for the collaboration.

In April 2021, SAIC Audi was officially established. Just before that year's Shanghai Auto Show, the SAIC Audi brand debuted alongside the flagship model, the all-new Audi A7L, followed by the Audi Q6 and Audi Q5 e-tron.

To keep pace with the new energy vehicle era, Audi and SAIC Motor signed a memorandum of understanding on deepening strategic cooperation on July 26, 2023, pledging to accelerate the development of new electric vehicle models for SAIC Audi. The official partnership agreement was signed on May 20 of this year.

At the time, officials revealed that the two parties would jointly develop a new platform tailored for the Chinese market and create a new generation of high-end intelligent and connected vehicles based on this platform. The first batch of models will comprise three pure electric vehicles targeting the B-segment and C-segment markets, with the first model scheduled for market launch in 2025 and nine models by 2029.

This collaboration model not only significantly shortens the time-to-market for Audi's new energy products but also presents SAIC Motor with more opportunities for brand uplift. According to Audi China, "The new electric vehicle models jointly developed by Audi and SAIC Motor will embody Audi's pure brand genes."

However, the stable collaboration suddenly faced rumors that the upcoming new models would no longer bear the classic Audi logo, raising speculations about underlying reasons. Could there be dissent from FAW Audi?

2

● Changing Logos, Changing Images?

According to insiders quoted by foreign media, Audi's decision to change logos is based on "brand image" considerations and reflects its intention to utilize automotive architectures co-developed with its Chinese partner, SAIC Motor, while relying more on local suppliers and technologies.

This new electric vehicle series, internally codenamed "Purple," may either adopt a different logo or simply use "Audi" in the vehicle name. The first concept car in this series is set to debut in November, at which point Audi will elaborate on the series' "brand story."

While changing logos for brand image reasons is understandable, Audi, a globally renowned luxury automotive brand, has faced doubts about its electric transformation. Many netizens criticize its new energy products as "knock-off electric vehicles." Meanwhile, while SAIC Motor is a giant in China's automotive industry, it faces significant challenges in brand uplift, as evidenced by the underwhelming performance of its ROEWE brand.

Theoretically, the collaboration between Audi and SAIC should be a powerful union. However, SAIC Audi's journey has not been smooth. The collaboration's progress has been fraught with obstacles, and product sales have been disappointing.

Data shows that in 2022, SAIC Audi sold 6,280 vehicles overall, including 3,801 A7Ls, 1,721 Q5 e-trons, and only 758 Q6s. Sales improved slightly in 2023, exceeding 30,000 units, but this still lags far behind FAW Audi's nearly 700,000 sales.

In the first half of this year, SAIC Audi's sales continued to rise, approaching 20,000 units, representing a 107% year-on-year increase and equivalent to two-thirds of last year's total sales. Notably, the Audi A7L achieved significant growth, selling 13,500 units, up 168% year-on-year.

However, closer inspection of SAIC Audi's sales growth reveals hidden concerns. Firstly, sales are uneven across models, with the Audi A7L outperforming the other two models.

According to Autohome data, the Audi Q5 e-tron sold only 2,200 units in the first half of the year, with its best month being April at 470 units. The Audi Q6 sold 2,549 units, with its best performance in January at 661 units, which is unimpressive in the luxury vehicle market.

Secondly, to boost sales, SAIC Audi has resorted to price cuts several times. While discounts and internal purchase promotions are common in the auto industry, they also indicate that sustained growth for SAIC Audi is uncertain. Yang Siyao, General Manager of SAIC Audi's Marketing Business Unit, has stated that customers only consider purchasing a product if they identify with the brand and its values, not just because it's cheaper.

Therefore, in the era of new energy vehicles, CarVisibility believes that new products from the collaboration between Audi and SAIC Motor may benefit from adopting a new name or logo to break the stereotype of being a "knock-off" and usher in a new era. It remains to be seen whether Audi's heritage combined with SAIC's technology can succeed without relying on the four rings.

Source | CarVisibility

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