German luxury car maker Audi AG launched its flagship new A8 model in China yesterday in Beijing, following its record sale of other luxury sedans such as A4 and A6 in the nation in the first half of this year.

Chinese workers clean a showroom with a covered, newly revamped model of Audi's luxury A8 before its opening to the public in Beijing July 13, 2003. [Reuers]

The sales of A8, priced at 1.3 to 1.5 million yuan (US$157,000-US$181,200) each, is expected to build up the brand image of Audi, thus promoting the sales of its less expensive Audi A4 and A6 among the growing affluent class in China, company officials said. It also helps consolidate Audi's dominate position in the premium car market in China, the world's fastest growing market.

Erich Schmitt, member of the management board of Audi, said the sales of Audi A8 could reach up to 900 units this year, and hit 2,000 units next year.

Audi, which began to ship A8 sedans to China in 2000, sold 645 units last year.

"The Audi A8 is the top-notch product... I am optimistic that it could meet the right customers in China," said Schmitt in an interview yesterday.

"It will enable us to further extend our market leadership in the premium segment."

Audi sold two out of every three luxury cars in China. Earlier this month, Audi AG said its sedan sales in China increased by 84 per cent in the first half to 29,217 vehicles from a year ago. The sales includes 3,108 units of A4 since its started making the model in China in April. And A6, also made in China, totalled 25,272 units. The balance came from imports.

China market has contributed most of the growth for Audi's sales worldwide, which rose 1.4 per cent during the time with lower sales in home market in Germany.

"The sales in the first half proves that we are on the right track," Andreas Deges, executive director of Audi China, said yesterday at the launch ceremony.

Yesterday also saw the opening of an Audi Forum, a promotion centre in downtown Beijing's Oriental Plaza, just a few steps away from Tian'anmen Square.

Deges said with Audi A8, it is expected there will be a steep increase in sales of the Audi A4 and A6 models.

Schmitt said Audi sales are expected to exceed 50,000 units by the end of this year, from 36,492 units last year.

Schmitt said the locally produced cars and imported cars are two pillars in its Chinese market strategy.

The locally produced Audi cars, A4 and A6, help drive up the revenue, while the imports from Europe help build up the brand value.

Foreign companies have been eager to get a foothold in the fledgling premium car market in China. Audi's major rival BMW set up a joint venture with China Brilliance Auto in March to produce its 3 and 5 series sedans in China. Mercedes-Benz, part of DaimlerChrysler, is seeking local production in China.

Schmitt dismissed that the introduction of A8 sedan to China is to fend off the challenge from its foreign rivals.

"It (the launch of A8) has nothing to do with competition," he said. "It is our own business."

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