Can focus and concentration help traditional luxury carmakers win back the Chinese market? Audi's business in China is undergoing a new round of adjustment, and the nearly decade-long rivalry between its northern and southern joint ventures has come to an end. On October 26, Audi China announced that it had signed strategic agreements with China FAW and SAIC Motor respectively. Under the arrangement, FAW Audi will take full charge of operating the Four Rings brand, covering both internal combustion vehicles and the high-end new energy segment, while SAIC Audi will shift entirely to the AUDI letter-mark brand, focusing on luxury intelligent battery-electric models. Until the end of 2027, SAIC Audi may still sell Four Rings brand models, with the after-sales system and dealer rights maintaining a smooth transition.
Audi China stated that the strategy aims to strengthen the differentiated positioning of the Audi Four Rings brand and the AUDI letter-mark brand and their respective strategic priorities, and to further clarify the "dual brand, dual partner" channel architecture.
Four Rings and letter mark go their separate ways
The evolution of the northern and southern Audi structure is a microcosm of Audi's strategic adjustment in China. As the earliest luxury brand to enter China, Audi's cooperation with FAW has run deep for nearly 40 years, building a user base in the tens of millions on the strength of benchmark models such as the A6L and Q5L and long holding a leading position in the luxury car market. In 2016, Audi began joint venture negotiations with SAIC, planning to build another production base in the south to expand capacity and share in China, and the "northern and southern Audi" concept surfaced for the first time. It was not until 2020 that the three parties reached consensus, and SAIC Audi launched under an agency model, successively rolling out Four Rings brand models such as the A7L and Q6. The letter-mark AUDI, meanwhile, was born from a restructuring of Audi's operations in China. Against the backdrop of accelerating electrification, in May 2024 SAIC Motor and Audi signed a cooperation agreement to jointly develop an intelligent digital platform (ADP) for the Chinese market. In November of the same year, Audi and SAIC Motor officially launched the new luxury electric brand "AUDI," the first new brand released in Audi's 115-year history. In September 2025, AUDI's first mass-production car, the E5 Sportback, went on sale; in May 2026, the AUDI pure electric SUV E7X was launched.
The core driver pushing Audi to launch this systemic adjustment comes from external market and electrification transformation challenges. At present, the competitive logic of China's luxury car market has been completely restructured. Domestic high-end new energy brands are rising rapidly, with Li Auto, NIO, HarmonyOS Smart Mobility and others continuously seizing the price band above 300,000 yuan, and the criteria by which consumers judge luxury have fundamentally changed. The weight of traditional brand premiums and mechanical quality has declined, while intelligent cockpits, high-level advanced driver assistance, and local scenario adaptation capabilities have become core purchase factors. Without targeted adjustments to products and operating systems, market share will continue to be squeezed. Sales of traditional luxury carmakers such as Audi in the Chinese market are in decline, and in the era of intelligent electric vehicles they urgently need to create hit electric models to achieve economies of scale. Beyond the northern and southern Audi strategy, Audi China has recently adjusted its organizational structure and personnel. Starting November 1, 2026, Zhang Jun will take office as president of Audi China, succeeding Johannes Roscheck, while a chief operating officer (COO) position will be added and the management board streamlined into a two-person structure. Judging from Zhang Jun's past experience, he has hands-on experience with both the northern and southern Audi projects and a dual employment record at a luxury brand and a local carmaker, which helps better coordinate the resources of the two joint venture partners and drive the dual-brand strategy forward. The organizational adjustment is seen as compressing decision-making layers, changing the past model of remote decision-making by overseas headquarters, granting the local Chinese team greater market decision-making authority, and adapting to the fast-paced competition in the domestic market. Industry observers believe that SAIC Audi simultaneously carrying the Four Rings internal combustion business and the new AUDI pure electric brand makes it difficult to concentrate forces to compete with domestic high-end new energy brands. On the other hand, the Four Rings brand fuel vehicle products previously sold by SAIC Audi overlap with FAW Audi in price territory, making it hard to maximize internal synergies. This separation of northern and southern Audi will thoroughly clarify what had been a blurred division of labor, helping achieve efficient resource allocation.
SAIC Audi bets on the letter mark
For SAIC Audi, giving up the Four Rings mark is not so painful. After abandoning the Four Rings mark, SAIC Audi can focus on the intelligent electric vehicle track. SAIC Audi told Yicai reporters that the user profiles of fuel vehicles and electric vehicles are completely different, as are the requirements for products and services. When dealers provide services to users, the processes and requirements are also completely different. When carmakers define and develop products, they are also completely different. These three differences made SAIC Audi see that making trade-offs and becoming more focused is the only path to building a luxury new energy brand. Historically, there are few successful cases worldwide of the same brand, same channel, and same organization doing both fuel vehicles and intelligent electric vehicles together. Geely spun off Zeekr as an independent brand, Changan set up Deepal and Avatr separately, Chery founded iCAR, and BYD, after its new energy vehicles gained scale, also chose to directly stop production of fuel vehicles in March 2022. After this adjustment to Audi's brand layout in China, SAIC Audi will be the first joint venture luxury brand to put all its chips on intelligent electric vehicles.
Heavy bet on intelligent electric vehicles
The heavy bet on intelligent electric vehicles showed signs earlier this year. In April 2026, the Audi Innovation Technology Center landed in Shanghai; in September it completed business registration, with a shareholding structure of SAIC Motor 49%, Audi AG 41%, and Volkswagen Group (China) 10%. This is the first R&D entity Audi has established outside Europe covering the entire value chain from product definition and R&D to production and sales, and Audi's first overseas intelligent electric technology center. According to Audi, the center completes everything from product definition to sales in China, takes the lead in laying out software-defined vehicles and AI-defined vehicles, and plans to develop multiple all-new AUDI models based on the ADP 2.0 platform, with the first product expected to launch in 2028. Relying on the ADP intelligent digital platform, the AUDI letter-mark brand can achieve local forward development and rapid iteration, directly confronting the product cadence of local new energy brands. The Four Rings brand's electric vehicles, meanwhile, will continue to rely on the PPE platform to deliver global high-end electric technology. It is worth noting, however, that after SAIC Audi focuses only on the AUDI brand, challenges also exist from fierce market competition. In addition to the many Chinese new forces that have already carved up most of the luxury new energy vehicle market, traditional luxury brands are also stepping up their transformation efforts. Take BMW as an example: on August 21 this year, the new-generation BMW iX3 long-wheelbase version opened pre-sales at the Chengdu auto show, with a price range of 269,900 to 339,900 yuan; the limited-time starting price of the Audi E7X is 269,800 yuan, a difference of only 100 yuan. The entry prices of these two German luxury pure electric SUVs locking together to this degree shows that in the luxury pure electric tier, price competition is already extremely tight. Nevertheless, the reorganization of Audi's brands in China still retains a certain transition period (until the end of 2027). After the letter mark and the Four Rings mark are governed separately, the real test comes in 2028.
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