HANDELSBLATT EXCLUSIVE

China Dealers Push Audi for Damages Agreement

  • Why it matters

    Why it matters

    German carmaker Audi is being threatened with compensation claims in its most important market, China. Dealers there say the company has added too many distributors in recent years.

  • Facts

    Facts

    • Dealers in China are demanding €4 billion in compensation to cover their losses.
    • Audi has previously rejected the dealers’ claims, saying its business has been profitable.
    • But sales slumped 14 percent in December and 35 percent in January.
  • Audio

    Audio

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Chinese dealers have seen a once lucrative trade decline in recent years. Source: Reuters

Audi dealers in China expect to reach an agreement with the Volkswagen subsidiary by the end of the month on billions of euros in damages claims, the head of the dealers’ association in China, Song Tao, has told Handelsblatt.

“Audi is going to pay, only the amount hasn’t been worked out,” Song Tao said in an interview.

The dealers in China claim Audi has added too many distributors in recent years, contributing to a drop in sales and 28 billion yuan (€4 billion) in losses. The dealers are demanding this money back in compensation.

The two sides have been disputing a remedy for weeks. An Audi spokesperson in China said negotiations were continuing, without going into detail.

“We are holding intense discussions with our partners and want to come to long-term, sound decisions,” the spokesperson said.

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