SAIC Motor to Push Ahead With Audi Tie-Up Despite Dealer Backlash
Yicai Global
/SOURCE : Yicai
SAIC Motor to Push Ahead With Audi Tie-Up Despite Dealer Backlash

(Yicai Global) Dec. 2 -- The chairman of SAIC Motor Corp. said China's biggest auto manufacturer plans to move forward with a cooperation deal it signed early last month with Audi AG despite opposition from the German luxury carmakers China dealers.

"Cooperation between SAIC and Audi has been sensationalized," Chen Hong said yesterday at a general meeting of shareholders. "But it's no big deal. Nothing will change."

Audi's dealers in China, the world's biggest car market, are against a tie-up between the German automaker and SAIC that they believe undermines their interests. Reports last week said dealers were demanding subsidies from Audi worth more than CNY20 billion (USD2.89 billion) and talks between the two sides were reported to have collapsed two weeks ago.

Representatives from 15 dealer groups met with top Audi executives in Foshan in the southern Chinese province of Guangdong on Nov. 1, asking the Ingolstadt-based company to give a satisfactory response before Dec. 1 or they would stop placing orders, according to the China Automobile Dealers Association.

"The details and content of cooperation are under discussion and will be released at the right time," SAIC's Chen said. "The cooperation with Audi will be free of problems if everything is handled properly."

Word came yesterday that senior Audi managers and dealers' representatives met for talks before yesterday and decided to suspend cooperation between SAIC and Audi on sales and networks and will hold another meeting for Audi, SAIC and Audi dealers before March 2017.

About the collaboration was suspended, an experienced dealer from North China told Yicai Global that Audi's stabilizing of dealers in this way and talks on sales and internet between SAIC and Audi will still proceed before the end of March 2017. But after three months, the union of Audi dealers will have weakened, he said.

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