German automaker Audi is reportedly engaged in discussions with SAIC Motor Corp, the parent company of MG, to acquire an electric car platform from the Chinese state-owned automaker. This move, described as “unusual” by Reuters, aims to increase Audi’s market dominance.
Audi Faces Pressure in China’s EV Market:
Audi faces tough competition from Tesla and local rivals like Nio in China’s booming electric vehicle (EV) market. Volkswagen Audi Group (VAG) seeks to purchase IM Motors, SAIC’s EV brand, to address this challenge. According to anonymous sources, the talks between the two companies are progressing.
IM Motors and L7 Sedan:
IM Motors, a luxury EV brand co-owned by SAIC and Alibaba Group, commenced deliveries of its L7 sedan in June 2022. While Audi has not confirmed the ongoing discussions, SAIC has refrained from commenting.
Details and SAIC’s Future:
The exact terms of Audi’s offer for the EV platform and the potential impact on the production of the L7 car remain undisclosed. However, various reports from indigenous media outlets, cited by Reuters, have alluded to this development.
Audi’s CEO’s Perspective:
Markus Duesmann, Audi’s CEO, set to retire in September, recently emphasized the need to accelerate model development to meet the rising demand for EVs, particularly in China. Duesmann noted that the shortage of Chinese-spec Audi vehicles has adversely affected the company’s sales.
Audi’s Future Plans in China:
In collaboration with Porsche, Audi is also working on a new EV platform called the “Premium Platform Electric” (PPE). This platform will be utilized for manufacturing vehicles at their upcoming facility in Changchun, China, by 2024. Audi spokespersons have stated that the plant will make necessary adjustments to the PPE platform to cater to the Chinese market.
Audi’s potential asset of an electric car platform from SAIC Motor Corp reflects the high competition and pressure global brands face in China’s growing electric vehicle market. As Audi’s sales in the EV sector lag behind competitors like Tesla and local brands such as Nio, the company is actively seeking ways to strengthen its market position. While the details of the discussions and the impact on SAIC’s existing L7 sedan production remain undisclosed, this move showcases Audi’s determination to accelerate its model development and meet the rising demand for electric vehicles in China. Audi’s collaboration with Porsche on the “Premium Platform Electric” (PPE) underscores their commitment to establishing a strong presence in China by creating a dedicated EV manufacturing facility. However, these developments will shape Audi’s future outcome in the Chinese market and its aspirations for increased market dominance in the electric vehicle sector.
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