Audi's "North-South Division": A Strategic Expectation with "Zero Negative Reviews"
Since SAIC and Audi took the first step in their joint - venture in 2016, the balance issue between FAW - Audi and SAIC - Audi has always been Audi's biggest internal problem in China. Therefore, different from the "tug - of - war drama" staged by FAW - Audi and SAIC - Audi 10 years ago, this "separation" will be a peaceful transition. Both sides are clear that this is just a recognition of the market pattern and a wise choice to end internal strife.
Although Audi has not made any statement yet, in the past week, the "separate governance of FAW - Audi and SAIC - Audi" has been widely spread in the automotive industry as an inevitable strategy. The core of this strategy is that all of Audi's fuel - powered vehicles and new - energy vehicles under the four - ring brand in China will be managed by FAW - Audi, while SAIC - Audi will focus on the development of the newly established local new - energy brand, the letter - brand AUDI. Many sources claiming to be from the "inside" of the Audi system say that the resource adjustment between the two sides has already started, and an official announcement will come soon.
As of the time when the reporter of Economic Observer submitted the manuscript, Audi has not given an official response to this news. Relevant internal personnel of Audi China said they were unable to comment on this matter. However, the latest news shows that Fermin Soneira, the CEO of the Audi - SAIC cooperation project, will transfer to the position of Chief Technology Officer (CTO) of Lamborghini starting from July 1st, and the successor is Fred Schulze, a current member of the Supervisory Board of Audi AG. This is interpreted by the industry as Audi setting a time node for adjusting its layout in China.
In fact, looking back at Audi's several statements since this year, it is not difficult to find some clues of the "separate governance of FAW - Audi and SAIC - Audi". The industry consensus is that whether from the perspective of Audi's layout in China, the current market situation, or the next - step development needs, the "separate governance of FAW - Audi and SAIC - Audi" is an irresistible trend. A clear cut in the business lines between FAW - Audi and SAIC - Audi is not only a prerequisite for the smooth implementation of Audi's next - step electrification strategy but also an effective way to straighten out the 10 - year - long dual - joint - venture opposition relationship.
The only inaccurate part in this news is the definition of the resource allocation between FAW - Audi and SAIC - Audi. Compared with the "separation of fuel and electric vehicles", the definition of "brand segmentation" is more accurate: the four - ring brand belongs to FAW - Audi, including both fuel - powered vehicles and high - end new - energy vehicles of Audi's globalization; SAIC - Audi will only be responsible for the products of the AUDI brand, focusing only on the new - energy market. In terms of asset adjustment, the biggest change is that the fuel - powered vehicle assets and businesses under SAIC - Audi will be merged into FAW - Audi.
Currently, the industry has given "zero negative reviews" to this adjustment idea. Since SAIC and Audi took the first step in their joint - venture in 2016, the balance issue between FAW - Audi and SAIC - Audi has always been Audi's biggest internal problem in China. Therefore, different from the "tug - of - war drama" staged by FAW - Audi and SAIC - Audi 10 years ago, this "separation" will be a peaceful transition. Both sides are clear that this is just a recognition of the market pattern and a wise choice to end internal strife.
After achieving a clear distinction in brand governance, FAW - Audi and SAIC - Audi will end the competition of the same products and are also expected to achieve a complete transformation from resource competition to real fuel - electric synergy. At the same time, the "exclusive identity" of SAIC - Audi in the new - energy field is also a key move for Volkswagen Group's transformation in China.
However, this seemingly simple adjustment of "one plus and one minus" will make FAW - Audi and SAIC - Audi truly go their separate ways. While forming a distinct positioning difference between "steadily holding the high - end market" and "radical innovation", the two may have different prospects. From the perspective of transformation, the separate governance is not the end but a new beginning.
FAW - Audi and SAIC - Audi Have "Gone Their Separate Ways"
From the high - level decision - making to the real - world logic, the possibility of the "separate governance of FAW - Audi and SAIC - Audi" has increased rapidly in 2026. At the beginning of this year, news of the adjustment between FAW - Audi and SAIC - Audi spread. In March, in response to the rumor that SAIC - Audi would be merged into FAW - Audi, Gernot Döllner, the global CEO of Audi, clearly denied it in an interview. He said that the dual - partner strategy is beneficial to the brand's development and emphasized that the two joint - venture companies have a clear division of labor. The core task of SAIC - Audi is to promote the development of the letter - marked Audi (AUDI brand), while FAW - Audi focuses on the product layout of the four - ring logo. At the Beijing Auto Show in April, Gernot Döllner responded to this matter again, saying that the "dual - brand, dual - partner" strategy is the core of Audi's strategy in China, and it will adhere to the development route of both fuel - powered and electric vehicles.
It is worth noting that in both statements, Gernot Döllner's different positioning of the two joint - venture companies revolves around the two brands, and the resource allocation and strategic synergy are also based on the premise that each of the two focuses on one brand.
At present, the practical conditions for the strategic adjustment are in place. At the market level, FAW - Audi and SAIC - Audi have actually formed different development routes. At the end of 2024, SAIC - Audi's AUDI brand emerged. By sharing SAIC's new - energy resources and deeply cooperating with Chinese technology companies, Audi has opened up a new path for the localization of new - energy vehicles. With the rapid launch of two new models, AUDI has essentially become the strategic core of SAIC - Audi. Gernot Döllner clearly stated in an interview that the "dual - brand" strategy has achieved initial results, and the overlap of customer groups between the AUDI brand and the four - ring brand is extremely low.
On the other hand, since the joint - venture project of SAIC - Audi was launched in 2016, there have been frequent disputes between FAW - Audi and SAIC - Audi. From the "Sanya Agreement" that fully tilted the rights and interests towards FAW - Audi to the phenomenon of "the same car with different logos and competition in the same showroom" that lasted for several years, facts have proved that under the situation where both FAW - Audi and SAIC - Audi pursue the "simultaneous development of fuel - powered and electric vehicles" strategy, it is difficult to achieve a balance, and internal strife will greatly reduce the effectiveness of Audi's transformation. Shifting from "competition of the same products" to "operation in separate tracks" is a market demand.
Secondly, the time window for the "separate governance of FAW - Audi and SAIC - Audi" is also approaching maturity. Currently, luxury joint - venture brands in China are generally facing pressure on sales and a decline in profits. Audi doesn't have time for continued internal strife and must "sort out its internal affairs" before the new pattern of the luxury car market is formed to seize the market opportunity. Due to its short entry time and affected by factors such as Audi's channel disputes in China, SAIC - Audi has lost the opportunity for development in the fuel - powered vehicle market. Secondly, SAIC - Audi's total sales in 2025 were 47,000 vehicles, among which there were only three fuel - powered vehicles of the four - ring brand and the Audi Q5 - etron in the inventory - clearing state. The scale is small, and the switching cost is low.
In addition, the "separate governance of FAW - Audi and SAIC - Audi" also conforms to Volkswagen Group's transformation idea in China. The top - level logic of Volkswagen's transformation is "multiple brands, dual joint - ventures, and differentiated division of labor", and Audi is a key move in the luxury car market. In April this year, Audi deepened its cooperation with SAIC and established Audi's first full - value - chain local R & D entity in China, the Audi Innovation Technology Center, in Shanghai, which will lead the development of four future AUDI - brand models. The establishment of this center makes Audi's layout in Shanghai similar to Volkswagen's layout in Hefei.
It's Not Just Resources That Are Being Cut
Once the strategy of the "separate governance of FAW - Audi and SAIC - Audi" is implemented, what is divided is not only the resources of the two Audi brands but also the future prospects of FAW - Audi and SAIC - Audi. Behind this is the competition of resources and capabilities between FAW Group and SAIC Group. Generally speaking, SAIC Group is stronger in terms of self - owned new - energy capabilities and resources, especially in software, three - electric systems, and mass - production speed. FAW Group has more advantages in high - end brands, hybrid battery - swapping, manufacturing quality, and supply - chain stability. The two form a distinct difference between radical innovation and steadily holding the high - end market.
FAW - Audi has a stable fuel - powered vehicle system and 38 years of joint - venture cooperation experience. This system includes the cooperation mechanism and a complete set of industrial chains and ecosystems from procurement to production and sales. However, in terms of new - energy and intelligent technologies, the support that FAW Group can provide to Audi is inferior to that of SAIC Group. In terms of electrification, SAIC Group has a rich portfolio of self - owned brands, has invested more than 150 billion yuan in new - energy vehicle R & D, has many R & D institutions and subordinate science - and - technology subsidiaries, and has mature technologies that can be shared. FAW Group has also accelerated its investment in the full - stack self - research system in recent years, but currently its self - developed new - energy products mainly focus on the Hongqi brand, which is in the same luxury market as Audi.
Specifically in cooperation with Audi, SAIC Group's full - stack self - developed technology, ecosystem, iterative mass - production speed, and cost advantages in new - energy technology can be injected into the AUDI brand; FAW - Audi has taken over Audi's high - end luxury platform PPE for the production of domestic versions of Audi's global new - energy models. It has an orthodox position in the platform and industry influence, can quickly implement Audi's global mature solutions, and is also the main carrier of Audi's "fuel - electric synergy" strategy. This way of dividing according to their respective strengths is easy for both FAW - Audi and SAIC - Audi to accept.
In short, Audi is expected to place more local innovation attempts on SAIC - Audi, but leave more headquarters interests with FAW - Audi. As the only domestic platform for the fuel - powered and new - energy products of the four - ring brand, FAW - Audi will get more global product resources from Audi and will also be Audi's main profit - making entity in China. In a sense, the profit from the fuel - powered vehicles of the four - ring brand will be the main support for the initial investment in the AUDI brand. At the same time, the unsold inventory of the four - ring brand of SAIC - Audi will also be a "hot potato" that FAW - Audi has to accept.
Therefore, the "separate governance of the north and the south" seems to be just Audi sorting out its brand layout, but behind it is a re - layout to ensure sustainable development. In addition, this restructuring is not a simple addition and subtraction of models. For dealers, the asset cutting is more complicated. The entire Audi dealer group will face new choices, and their survival situations may be polarized. For large - scale dealer groups at the top, they can make a two - way layout, opening stores of FAW - Audi on one hand and investing in SAIC - AUDI experience centers on the other. Dealers with sufficient funds and strong risk - resistance ability will share the dividends of increased concentration, resulting in a situation where the strong become stronger. However, small and medium - sized single stores in third - and fourth - tier cities may be in a dilemma, facing concerns such as the takeover of fuel - powered vehicle business, lack of funds for pure - electric transformation, and difficulty in customer acquisition. 70% - 80% of the income of SAIC - Audi dealers comes from fuel - powered vehicles of the four - ring brand. After the inventory of fuel - powered vehicles is cleared, the cash flow will face pressure in the short term. One option has stable profits but a shrinking market scale, and the other is on the cusp of the trend but with an uncertain future and no short - term profit. In this situation, the risk - aversion psychology will make dealers enter a wait - and - see state.
It cannot be ignored that even if the "separate governance of FAW - Audi and SAIC - Audi" achieves product - positioning differentiation, competition still exists between the two Audi joint - venture companies at the market and brand levels. From the existing disputes over the "orthodoxy" of the brand and the reality that new - energy products are entering the same market segment, "balance" will still be Audi's main issue in China.
In response, Gernot Döllner has set the tone: "Audi has fully considered the development of the four - ring brand and the AUDI brand. We need to work hand in hand with our two major partners to share Audi's core technologies and ensure that both brands can provide a genuine Audi experience. In addition, we not only want the AUDI brand to stand at the forefront of the new era but also gradually promote the transformation of the four - ring brand."
In 2025, the total sales volume of the luxury car market in China exceeded 4 million vehicles. Audi believes that this market is large enough and has enough room for growth to accommodate the two brands under Audi to face Chinese consumers in the same market. Fermin Soneira believes that Audi's goal is to form a synergy through the efficient cooperation between the headquarters and the joint - venture partners. "The industry competition we face mainly comes from the external market, rather than internal games."
Roman de Rooij, the President of Audi China, has a more practical view: From a market perspective, the AUDI brand and the four - ring brand have different logos, clear positioning, and target two different customer groups. One group of customers highly recognizes and trusts luxury performance and brand heritage, and they hope to see more innovative technology applications. The other group of customers comes from the young generation who are well - versed in digital technology, and they have high expectations for intelligent technology, product performance, and brand value. Therefore, whether customers choose fuel - powered vehicles or electric vehicles, their choice is Audi, which is also what Audi is happy to see.
This article is from the WeChat official account "Economic Observer", author: Liu Xiaolin, published by 36Kr with authorization.