In the traditional automotive market, BBA is undoubtedly the king. However, with the rise of new energy vehicles in recent years, traditional luxury cars have fallen into a predicament. Under such circumstances, transformation has become an inevitable choice for survival. Recently, Audi took the lead in launching a new luxury brand, AUDI. Will Audi still be in demand without the four rings?

I. Audi unveils its new luxury brand AUDI?

According to reports by Jiemian News, Audi recently announced its new brand AUDI in collaboration with SAIC, becoming the first traditional luxury automotive brand globally to launch a new brand strategy in China. The products launched under this brand will not bear the familiar four-ring logo of Chinese consumers but will instead feature the "AUDI" lettering.

Almost the entire senior management of Audi's Board of Directors flew to Shanghai to support the launch. Ralf Brandstätter, Chairman and CEO of Volkswagen China, Wang Xiaoqiu, Chairman of SAIC, Jia Jianxu, President of SAIC, and Zu Sijie, CTO, also attended the event.

The first concept car of the new brand, AUDI E, is positioned as a mid-sized pure electric shooting brake coupe, competing with NIO ET5T. The German side is responsible for the traditional interior and exterior design and chassis tuning, while the Chinese side provides electric and intelligent technology. It is planned to be produced at SAIC Volkswagen's Anting plant and launched on the market next summer.

According to Securities Daily, "In the next three years, we will introduce three more products to the Chinese market." Markus Duesmann, Chairman of the Management Board and Technical Development Director of AUDI AG, said in an interview with Securities Daily that Audi will launch 20 electrified products globally in the next three years, most of which will be introduced and locally produced by Audi's Chinese partner FAW-Volkswagen. SAIC Audi will focus on using localized technology to define new products that meet the needs of the Chinese market.

Debuting alongside the AUDI brand is the AUDI E concept car, a new model based on the Advanced Digitized Platform jointly developed by Audi and SAIC. Although it is a concept car, it has some technical parameters that can be announced, rather than just an empty shell. AUDI E features dual motors, Audi's iconic quattro all-wheel-drive system, a 0-100 km/h acceleration time of 3.6 seconds, a battery capacity of 100 kWh, a CLTC range of over 700 km, an 800V architecture that allows for a range of 370 km after a 10-minute charge, and can also be equipped with rear-wheel steering, continuous damping control, and air suspension. It also features a large connected screen and streaming rearview mirror, similar to domestic new energy vehicles. The mass-produced version of AUDI E is positioned as a B-segment vehicle and will be produced at SAIC Volkswagen's Anting production base in Shanghai, with an official debut and delivery in 2025. Additionally, the collaboration project between SAIC and Audi will launch three pure electric vehicle models in the next three years, covering the B-segment and C-segment markets.

II. Will Audi still be in demand without the four rings?

As the global automotive industry undergoes unprecedented changes, Audi's announcement of a new independent brand, AUDI, is seen as a significant strategic adjustment in response to the surge of new energy vehicles. How should we view Audi's layout? Is the outlook for AUDI promising?

Firstly, Audi's current choice is undoubtedly a reluctant move amidst difficulties. In the era of great change in the automotive industry, new energy vehicles are sweeping in like a tidal wave, reshaping the market landscape. Traditional luxury automotive brand Audi faces unprecedented challenges in this wave, and its decision to launch a new luxury brand, AUDI, can be seen as a reluctant move of "joining if you can't beat them."

For a long time, Audi has established remarkable achievements in the traditional fuel vehicle sector with its superior technology, exquisite craftsmanship, and strong brand image. However, this success has also led to a problem of path dependence. Substantial resources have been invested in the research, development, production, and sales models of traditional fuel vehicles, forming a relatively fixed system. When new energy vehicles emerged in full force, this path dependence became a heavy burden on Audi's transformation. For example, its traditional engine R&D team, production lines, and related supply chain systems struggled to quickly adapt to new demands during the transition to electrification.

In the field of new energy vehicles, technical routes, market demands, and business models are vastly different from those of traditional fuel vehicles. Electrification is not merely replacing an engine with an electric motor; it also involves a series of new technological fields such as battery technology, electronic control systems, and intelligent connectivity. If Audi were to transform solely on its own, it would have to start from scratch in these new areas, while competitors are already accelerating in the new energy race. Therefore, creating a new brand, AUDI, has become a seemingly risky yet necessary strategy. This new brand can free itself from some of the constraints of Audi's traditional fuel vehicle brand image and explore the unique development path of new energy vehicles more freely.

Secondly, collaborating with SAIC undoubtedly borrows from the strategies of emerging forces. Audi's choice to collaborate with SAIC to create the new brand AUDI is a crucial step in its new energy transformation strategy. Compared to directly entering the new energy sector, this collaboration model offers numerous advantages.

On the one hand, as a significant player in China's automotive industry, SAIC has a deep understanding of the Chinese market. China is the world's largest automotive market and the region with the fastest-growing new energy vehicles. Chinese consumers' demand characteristics, consumption habits, and aesthetic preferences for new energy vehicles are significantly different from those in other countries. SAIC's years of deep cultivation in the domestic market have given it access to a wealth of first-hand data and market insights about Chinese consumers.

On the other hand, SAIC is relatively mature in new energy technology development. In recent years, SAIC has invested substantial resources in the field of new energy vehicles, achieving notable results in battery technology research and development, electric drive systems, and intelligent connectivity technology. By collaborating with SAIC, Audi can fully leverage these advanced new energy technologies to accelerate the research and development process of AUDI brand new energy vehicles.

Furthermore, borrowing from the strategies of domestic emerging forces is the significant value of Audi's collaboration with SAIC. Domestic new energy vehicle emerging forces such as NIO and XPeng have pioneered many new ideas in brand building, user operations, and sales models. They have attracted a large number of consumers by creating high-end brand images, establishing user communities, and providing personalized services. In its interactions with the domestic market, SAIC has a deeper understanding of these new strategies. Audi can integrate these new brand operation and marketing models into the development of the AUDI brand through its collaboration with SAIC, finding a feasible path for itself in the fiercely competitive new energy market.

Thirdly, the essence of Audi's collaboration with SAIC is still to keep warm together. The collaboration between Audi and SAIC on the path of new energy transformation is more like a behavior of keeping warm together, with both parties fulfilling their respective needs to cope with fierce market competition.

For Audi, it urgently needs SAIC's familiarity with new energy strategies and manufacturing capabilities during its new energy transformation. As mentioned earlier, Audi's successful experience in the traditional fuel vehicle sector cannot be fully replicated in the new energy sector, and it needs to learn from the innovative models of domestic new energy vehicle enterprises. SAIC's manufacturing and operational experience in the new energy vehicle market can help Audi better build the AUDI brand, thereby reducing costs and risks in its new energy transformation. It can also share resources, technologies, and production facilities, avoiding large-scale upfront investments and potential technology research and development failure risks.

For SAIC, collaborating with Audi can bring Audi's industrial design and brand premium. As a globally renowned luxury automotive brand, Audi has made remarkable achievements in industrial design. Its classic car designs are renowned for their simplicity, elegance, and strong technological feel, embodying a high level of design in terms of body lines, interior layouts, and detailed handling. SAIC can integrate Audi's industrial design concepts into the product design of the AUDI brand, enhancing the quality and appeal of its products.

Fourthly, AUDI's market environment is surrounded by enemies on all sides. Despite the support of a powerful partner, AUDI, as a new force entering the highly competitive new energy vehicle market, will still face severe challenges. In the competition in the new energy vehicle market, new brands are emerging in an endless stream, with each brand vying for market share. Domestic new energy vehicle enterprises represented by Li Auto, NIO, XPeng, WM Motor, and Leap Motor have already gained a certain first-mover advantage and ecological niche in the market.

As an emerging brand, AUDI faces close competition with these brands from the moment of its inception. At the technical level, it needs to reach or surpass competitors in terms of battery range, charging speed, intelligent driving, and intelligent connectivity. At the product level, it must launch models with unique selling points and appeal to meet consumers' increasingly diverse needs. At the brand level, it needs to establish a clear and attractive brand image in a short period, allowing consumers to recognize its value as a luxury new energy brand. This all-round competitive pressure is undoubtedly enormous for an emerging brand.

However, the biggest issue may be the brand identity. The AUDI brand does not adopt Audi's traditional four-ring logo. While isolating itself from the Audi brand allows AUDI to shake off some consumers' inherent perceptions of Audi's traditional fuel vehicle image and more flexibly shape its unique image as a new energy luxury brand, the problem is not that simple. Audi's four-ring logo represents a long history, outstanding quality, and a high-end brand image, with significant brand premium capabilities. If the AUDI brand loses the support of Audi's brand premium during its development, its development path will undoubtedly be more difficult. In consumers' purchasing decisions, once the aura of the four-ring logo is gone, AUDI needs to invest more resources in brand building, gradually establishing its brand reputation through product quality, technological innovation, and excellent service, which is undoubtedly very unfavorable for an emerging brand.

Therefore, Audi's launch of the new luxury brand AUDI is a bold attempt in the era of new energy vehicles. However, to truly conquer the domestic market, AUDI needs to overcome far more difficulties than imagined. This requires Audi and SAIC to continuously explore and innovate during their collaboration. What will be the outcome? Let's wait and see.