The core executives of FAW Audi's PPE have left their positions. How will the production and sales of the Q6L be coordinated?

Among domestic automakers, FAW Audi and PPE are one of the few combinations where sales and production are completely separated.

01. Departure of PPE Production Executive

For the domestic Audi new energy PPE (Premium Platform Electric) project that has been in preparation for nearly four years, the first model, the Q6L e-tron family, was launched not long ago. Now, new challenges have emerged.

We've exclusively learned that Wang Kaiyu, the deputy general manager and a member of the management committee of Audi FAW New Energy (hereinafter referred to as Audi FAW), recently left his position and will most likely be transferred back to the FAW-Volkswagen system for a new role.

Wang Kaiyu has worked in the FAW system for many years. He was in charge of the Foshan branch of FAW-Volkswagen for several consecutive years and participated in many large-scale projects at the Changchun and Foshan plants, with rich experience in production and manufacturing management.

During his nearly two-year tenure at Audi FAW, Wang Kaiyu was mainly responsible for production and logistics. Coincidentally, in the past two years, the core task of Audi FAW was the local production of the Audi PPE platform, with three new energy vehicles initially introduced for domestic production. This is Audi's first pure-electric factory in China. As a Chinese executive overseeing a new platform and a new factory, Wang Kaiyu faced completely different challenges in his area of expertise.

PPE is a new energy vehicle platform shared by Audi and Porsche. Different from Audi's mature fuel vehicle production system, many parts of PPE have not been localized in China, and a large proportion of imported parts are needed in the early stage.

Schröder, CEO of Audi FAW

Another challenge is team integration. We've learned that a large proportion of the project managers and engineers involved in the construction and commissioning of the domestic PPE factory are from overseas. They brought in mature processes, but there are differences in their salary structures and vacation systems compared with the domestic team, which has increased the difficulty of team management and integration to some extent.

At the end of last year, Auto Pixel was the first to point out that due to various reasons such as team cooperation and software delays, the official mass production (SOP) of the Q6L of Audi FAW was postponed.

Now, the most difficult part of the early stage has passed. In August this year, the first models of the PPE platform, the FAW Audi Q6L e-tron and Q6L Sportback e-tron, were launched. We've exclusively learned that the next two products planned for the PPE platform, the A6L e-tron and the yet-to-be-officially-unveiled E6 project, have entered the pre-series production stage and will soon be in full mass production.

After the above three nearly completed new car projects, Audi FAW will not start the R & D of the next new project until the end of this year. In the next few months, an important task for Audi FAW is to finalize the localization of parts for the Q6L, A6L, and E6 projects.

After Wang Kaiyu's departure, Audi FAW has not yet revealed his successor.

02. Preparations on Both Production and Sales Ends

The challenges on the production end have not been fully alleviated, while the pressure on the sales end of PPE is gradually easing.

A person close to the person in charge of FAW Audi Sales Co., Ltd. (hereinafter referred to as FAW Audi) told us that the initial sales of the two models in the Q6L e-tron family in Shanghai were not ideal.

On August 7th, the FAW Audi Q6L e-tron family and the A5L were officially launched on the same day. The limited-time price (the official unified discounted price) of the former was set between 348,800 and 398,800 yuan. Although it is already tens of thousands of yuan cheaper than the pre-sale price, in the current highly competitive domestic new energy market, the price of the new PPE models is not attractive enough. For example, the recently pre-sold or launched popular pure-electric SUV models, the NIO ES8 and the Li Auto i8, are larger in size than the Audi Q6L, but their minimum prices are 10,000 to tens of thousands of yuan lower.

The current selling price is the result of efforts by FAW Audi. The Q6L family is a high-end product of the Audi brand and shares many parts with Porsche's pure-electric vehicle, the Macan EV, whose price is set between 598,000 and 968,000 yuan. With its high-end positioning and many imported parts, the early production cost of the Q6L is high, making it difficult to offer a lower price.

We've learned that Audi FAW is continuously promoting the localization of key parts, but this work will not be completed until next year. The window period for FAW Audi to further expand the market discount for the new PPE models is likely to be next year.

FAW Audi A5L

The sales system is also in preparation. FAW Audi is trying the "integrated direct sales" model for the Q6L e-tron family and the A5L. That is, consumers buy cars directly from the official FAW Audi, and dealers are only responsible for providing services, including agency sales and delivery. The advantage of this model is that the car sales prices will be more transparent and the services will be more standardized. However, this approach requires building strong middle-office capabilities and digital capabilities, which may affect sales in the short term.

A person close to a FAW Audi 4S store told us that compared with Audi's previous new models, the current market promotion for the Q6L is significantly weaker. This may be due to two reasons. There is a strong wait - and - see attitude in the market, and the newly launched "integrated direct sales" system relies more on the input from the manufacturer, making it impossible to allocate too many resources in a short time. The Q6L was launched at the same time as the main - selling model A5L, and the latter took away more marketing resources.

With two important new cars launched at the same time, the sales system is short of resources, and there is a lack of coordination between the production and sales systems of the PPE platform.

Among domestic automakers, FAW Audi and PPE are one of the few combinations where sales and production are completely separated. Usually, automakers establish wholly - owned or majority - owned sales companies to be responsible for sales - related businesses such as marketing, market operations, user management, and channel management. For example, FAW Audi is 100% owned by FAW - Volkswagen Automobile Co., Ltd.

Audi FAW, which is responsible for the production of the PPE platform, is a new company established at the end of March 2021. Audi holds 55% of the shares, Volkswagen China holds 5%, and FAW Group holds 40%. As a result, there is no direct equity relationship between Audi FAW, which is responsible for PPE production, and FAW Audi, which is responsible for sales.

The complete separation of the OEM and the sales company means that when the Audi PPE project faces fierce competition from new forces with integrated production and sales such as Tesla and NIO, it may be at a disadvantage in terms of decision - making efficiency, resource coordination, and market response speed. For example, currently, Audi FAW's limited marketing resources are mainly used for corporate - level promotion, rarely covering specific products, which is exactly what is most urgent at present.

Wang Kaiyu's departure marks the end of the tough early - stage production phase of the PPE project. However, the next battle on how to coordinate production and sales is waiting for the new management and the entire Audi system to face. Audi's electrification transformation still faces numerous challenges.

This article is from the WeChat official account "Auto Pixel". Author: Xing Ruifang, Editor: Mao Shiyang. Republished by 36Kr with permission.