Yongda targets sharp increase in Audi sales

PUBLISHED : Wednesday, 29 May, 2013, 12:00am
UPDATED : Wednesday, 29 May, 2013, 2:51am

China Yongda Automobiles Services Holdings, a distributor of luxury vehicles, aims to sharply increase the sale of Audi-branded cars after signing an agreement with Volkswagen.

Yongda this month signed an agreement with a unit of Volkswagen's mainland joint venture, giving it priority to sell new models of Audi vehicles and take control of certain dealerships.

The firm aims to sell 50,000 units of the brand annually by 2018 or 2019, up from 3,500 last year, according to vice-chairman Wang Zhigao. "The deal will have significant impact on our right to expand the Audi sales network," he said yesterday. "We will open Audi stores in important cities and Audi will account for a bigger part of our business."

Sales of luxury cars on the mainland are likely to outpace the projected 8 to 9 per cent annual growth in the next three years despite a slowing economy and a crackdown on lavish spending by government officials, according to industry researcher Alix Partners.

Yongda received a licence at the end of last month to provide car financing and it expected the business to help boost sales, Wang said.

The company will set aside about one billion yuan (HK$1.26 billion) for the finance business this year and next, although Wang said it did not plan to sell a stake in the market to raise funds.

Yongda's sales rose at least 10 per cent in the past two months as carmakers controlled their output and the economy gradually improved, he said.

The Shanghai-based firm posted a 6.9 per cent drop in net income last year on weak consumer sentiment and a rise in distribution and selling expenses.

It planned to add 34 dealerships this year, selling brands including Tata Motors' Jaguar Land Rover and Bayerische Motoren Werke's BMW vehicles, to the 106 stores it had as of the end of last year, it said last month.

Yongda was interested in selling electric vehicles and might contact Tesla Motors, executive vice-president Xu Yue said.

The company said it was still in talks about distributing Maserati vehicles on the mainland.