Published on April 12th, 2021 | by Daniel Sherman Fernandez0
Audi Will Continue To Survive In Malaysia Or Not
There seems to be no growth in the Audi business for years.
Since the successful launch of the Audi A6 hybrid some 8 years ago in February 2013 with more than 2,500 units sold, the brand has just not seen a rise in total yearly sales. Yes, Audi in Malaysia seems to have been forgotten by its bosses in Ingolstadt, Germany.
From 2015 to June 2018 there was a flurry of activity from the Audi Malaysia office with a strong team in place trying to give Mercedes-Benz Malaysia and BMW Malaysia a tough fight. It only managed to nudge the sales figures up a smidgen. BMW and Mercedes had invested heavily years earlier in local assembly and had a stronger dealer network around the country and so their year on year sales continued to rise while Audi sales number in Malaysia took a slow year on year drop.
Meanwhile, to strengthen its position in Malaysia, BMW set up a new SDAE Engine Assembly Facility in Kulim, Kedah in May 2018 at a cost of over RM132 million.
Then in August 2019, Mercedes-Benz Malaysia started exporting their Malaysian assembled C 180 sedan to the Philippines.
This above and more has been the reasons why both brands have seen year on year growth and an even best year ever for BMW Malaysia in 2020, during the Covid-19 pandemic. Imagine that.
However, having a fully imported product lineup against the strong local assembled product line-up from Mercedes and BMW, Audi in Malaysia could not challenge in pricing with all its products, from the nimble A3 sedan to the intimidating looking Audi Q8 luxury SUV.
Meanwhile, surprisingly enough, the number of Audi vehicles on the road seemed to be increasing and this was coming from used reconditioned Approved Permit holders who were enjoying lower import tax payments and passing on ‘some’ of the savings to buyers who wanted the four rings. Yes, the Audi four rings logo continued to gain popularity with affluent Malaysians, but they were happy to buy reconditioned used units and look at private workshops for their after-sales and maintenance.
Today, Audi in Malaysia is seeing a very slow decline in new car sales, with their 2020 total sales figures dipping just below 250 units. Yes, this is less than the total sales figure for some supercar brands in Malaysia.
Meanwhile, the total Audi sales in Singapore has hit 10 times plus the Malaysian sales figure in 2020 and this is a testament to its product lineup and desire factor. We are sure the used reconditioned market in Malaysia is selling more than a 1,000 plus units a year and this is what Audi Malaysia could be selling if they start local assembly.
So, why is this happening to a successful German car brand? Simple, Audi till today does not have local assembly facility in Malaysia. Its partner, the DRB-Hicom group has vehicle assembly partnerships with Volkswagen, Mercedes-Benz, Mitsubishi, Isuzu to name a few in Pekan Pahang and they have Euromobil dealerships together with RIMAU and Goh Brothers to keep the brand alive around the country. Yes, just 3 official Audi dealers in 4 locations for Malaysia right now.
If Volkswagen can assembly its Arteon, Passat and Tiguan models in Pekan, why can’t Audi assemble the Q3, Q5 SUV’s and the A4 and A6 luxury sedans in Pekan?
We wait and see what happens in coming months as news of Porsche AG starting local assembly for the first time outside of Germany in Kulim Malaysia shows confidence in Malaysian vehicle assembly operations. This move should have Audi management in Ingolstadt looking seriously at local assembly here? Or is Malaysia not an important market for this luxury German car brand?