Recently, news about the adjustment of Audi's two major brands in China (also known as the "North South divide" strategy) has once again emerged, and Audi China has once again clarified that the rumors are not true.

This news was spread after the mid year communication meeting held by Audi China President Luo Yinghan, arousing people's imagination. But in fact, Luo Yinghan made it clear at the beginning that the complexity of the transformation far exceeded expectations, and there was no news on the progress of the north-south adjustment.

One of the reasons why the "North South divide" of dual brands is difficult to strike is that Audi has not yet been able to penetrate the cycle and see the future trend clearly. At present, Audi's most accurate judgment is that the automotive industry is at its most critical moment in history, as the price war has led to unprofitable Chinese car companies and dealers.

According to Luo Yinghan, there are at least three challenges that Audi China team is focusing on in the strategic promotion. Firstly, how to ensure the coexistence and prosperity of two brands in China (the Four Ring brand and the Alphabet brand AUDI)? Secondly, how to maintain the "brand threshold" of luxury cars? Thirdly, how to attract the new wealthy population in China?

Only by finding the answer can strategic adjustments be advanced. The problem-solving approach depends on the judgment of the "endgame". According to Luo Yinghan, "For Audi, it is very important to consider what the ultimate outcome will be after the end of the price war in the future.

We need to think strategically about what direction the market will develop in after the price war ends. What kind of final chapter will there be? Will the brand become important again? If we only focus on the price war, the ultimate result is that no company can survive

This is a grand and unavoidable long-term issue. Audi has placed it in the forefront, clearly hoping to derive the answer and gain the opportunity to layout ahead, just like launching the AUDI local brand.

Two brands must go hand in hand

In the first half of 2026, traditional luxury car brands encountered a Waterloo in China, with a collective sales decline of about 30%. For Audi, the historical experience of the past forty years has rapidly collapsed in the past two years, and at the same time, more than half of 2026 has passed. However, the change of "the market will tend to stabilize and enter a new round of integration" is slower than Audi expected.

For us, this is a very important moment that determines our future in China. Luo Yinghan said. Dual brand is a choice made by Audi after trying to predict future trends, with the four ring brand covering both fuel vehicles and new energy vehicles, while the AUDI brand will fully focus on the pure electric market. On this basis, Audi is attempting to completely separate the two brands and assign them to FAW Audi and SAIC Audi respectively. At the execution level, the most important action is to divest SAIC Audi's few fuel vehicle businesses to FAW Audi, and at the same time adjust the dealer network accordingly.

At present, every task revolves around the grand strategy of dual brand adjustment, but the difficulty exceeds expectations. Luo Yinghan admitted that "transformation involves multiple links such as headquarters, sales organization, and dealer network, and requires the entire system to adapt to the new market environment and user needs. The complexity of this process is indeed higher than initially expected.

At present, the prospect of FAW Audi is the biggest variable in the dual brand adjustment. In the first half of this year, FAW Audi's gasoline cars fell by nearly 30%. Like all luxury car brands, Audi is considering how to respond to this situation. We need to take measures in finance and automotive finance to make our products more attractive, "said Luo Yinghan

At the same time, the input-output ratio of the PPE new energy platform introduced at a huge cost did not meet expectations, and the Audi global electric vehicle e-tron series produced was severely squeezed by domestic brands. Audi plans to confirm to the outside world that "international car brands can also create competitive pure electric products" through measures such as equipping ADS 4.0, OTA upgrades, and strengthening sales and service systems.

Fuel vehicles are the profit base of joint venture car companies, while electric vehicles are the future direction. FAW Audi is clearly under pressure on both tracks.

Luo Yinghan frankly stated that the letter brand AUDI has formulated a very clear future development strategy and plan, but the development strategy of the Sihuan brand has not yet been finalized. Audi must ensure that both brands do not fall behind in order to achieve a harmonious coexistence of the two brands.

In addition, the price war and dual brand segmentation have put dual pressure on Audi dealers to maintain profitability and reset the network. In order to retain high-quality online investors, Audi must provide sufficient support.

This complexity emphasizes the importance of having a clear strategy unprecedentedly. Luo Yinghan believes that the current level of competition is difficult to sustain, and Audi must think ahead and adjust its business model from the perspective of the "endgame after the price war".

However, in the face of a rapidly changing market, Audi has yet to make a final decision. At present, dual branding is a seemingly pioneering but actually the safest risk diversification strategy.

At the communication meeting, the only final idea shared by Luo Yinghan was: "Will gasoline cars, like mechanical watches, be revalued after experiencing shocks and become niche luxury goods with high premiums

Misunderstanding of luxury between China and Europe, a closed-loop problem

The other two propositions standing in front of Audi are both related to the shrinking premium of traditional luxury cars in China. The Audi management team deeply feels that the "threshold" and sense of superiority of traditional luxury cars are disappearing in China. In the words of Luo Yinghan, the boundary between mass-produced Volkswagen models and luxury models is becoming increasingly blurred. In the past 50 years, the difference between these two models has been comprehensive, reflected not only in price, but also in design, interior, materials, driving experience, brand image, and other aspects. The design features of luxury cars are enough to make consumers accept their unsatisfactory space. But in today's China, this boundary no longer exists, competition is all focused on price, and the various characteristics of luxury brands are no longer competitive. This is a fatal blow to Audi, a luxury brand that relies on innovation and design.

Is this blurring a short-term phenomenon or a long-term norm? How should traditional luxury brands re-establish differentiation and break out of the situation of relying solely on price range competition? "Luo Yinghan threw this question to the media.

This' challenge 'is brought about by the rapid upgrading and price competition of Chinese domestic brands in the field of electric intelligence. The response plan being implemented by Audi is to strengthen the display of the 'Audi gene'.

The Shanghai Innovation Technology Center, officially established on September 2nd, is an important implementation of this idea. Luo Yinghan emphasized that in addition to fully utilizing China's leading technology and innovation capabilities, the center must also ensure that every car clearly displays Audi's genes, using Audi's unique "whole car luxury perception" to combat homogenization.

Regarding the subjective experience of "luxury perception," Luo Yinghan explained that "an Audi must look and drive like an Audi, sit in, touch it, experience it, and also make people feel the distinct Audi characteristics. It is reported that returning to minimalist design language will be Audi's key competitive focus.

The change in users is another variable that determines Audi's dual brand strategy. It is difficult for old users to maintain incremental purchases, and the new generation of high net worth individuals have a new definition of "luxury" - Luo Yinghan admitted that this is indeed a change that Audi is closely monitoring.

All traditional luxury brands are implementing a "youthfulness" strategy to compete for the younger generation of Chinese consumers. But the new generation of high net worth individuals emerged in intelligent technology companies and new economic formats, and their definition of luxury is largely determined by functional value and technological experience.

The misperception of "luxury" between China and Europe has made it a closed-loop problem for traditional luxury brands to maintain premium prices. Audi has admitted that it is conducting in-depth research and thinking on the unique definition of luxury for Chinese consumers, and providing insights to its global headquarters for product and strategic adjustments.

In Luo Yinghan's view, this question is not unsolvable. Choosing a luxury car is not just a rational product decision, but also a highly emotional process. Considering that Audi's vast user base can generate spillover effects, strengthening emotional connections with new and old users through brand marketing will be an important strategy for Audi in the future.

In addition, Luo Yinghan believes that the key to competition is who learns and iterates faster. Through diversified cooperation with Chinese technology companies such as Huawei and Momenta, as well as the proprietary research and development capabilities of the Shanghai Innovation Technology Center, Audi is updating its brand's intelligent image through "accelerated learning".

The three major propositions regarding the Chinese market determine the overall strategic direction of Audi. From Luo Yinghan's thinking, it can be seen that reducing internal friction, redesigning the specific pace of dual brand adjustments, and following up with changes in the Chinese market more quickly will be Audi's key actions in the future before a final answer is reached.

(Author Liu Xiaolin)