BEIJING: After nearly a century of Audi AG branding every car with four interlocking rings, the German automaker shed its iconic marker last year in China, betting a sleek, tech-heavy electric vehicle would reignite consumer interest.
So far, the revamp - it's now just 'AUDI,' all caps - has done little to kickstart a turnaround in sales.
While the E5 Sportback, the debut model from the sub-brand produced by Volkswagen AG's joint venture with SAIC Motor Corp, has garnered critical acclaim, the view from the showroom floor is less enthusiastic.
It sold just 605 units in January, according to data compiled by Bloomberg Intelligence.
Between its launch in September and the end of December, it sold 6,650 units, according to the company.
Even fans of the car, exclusive to China, warn of a number of wrinkles that need to be ironed out.
"I prefer cars that are a bit more niche and I really love the styling," said Neo Shen, a Shanghai-based engineer who bought the most premium version of E5 Sportback.
The car retails for between 235,900 yuan (RM134,770) and 319,900 yuan (RM182,760).
But "the infotainment system is a total work-in-progress and full of bugs," he said.
The air conditioning turns on by default every time he starts the engine and the driver-assistance features are too slow for city driving, making him miss off-ramps on highways.
Like most foreign automakers, Audi is pouring resources into tailoring its lineup to compete with the digital sophistication of popular local brands like Xiaomi Corp, which effectively offers a smartphone on wheels.
Viewed as better able to meet local tastes, and with the ability to bring advanced EVs to market at a rapid pace, Chinese carmakers have seen explosive sales growth in their home market.
They accounted for about two-thirds of the country's retail car sales last year, up from less than 40% five years earlier, according to industry data.
"The brand equity of the German premium brands in China has disintegrated much faster than anyone expected," said Matthias Schmidt, an automotive analyst based near Hamburg.
"Consumers there are increasingly buying local brands, and there's reasonable concern that those sales won't come back."
Audi's early struggles with the E5 Sportback contrast with both Tesla Inc's Model Y and Xiaomi's YU7 - the car's main direct rivals - which have been hitting deliveries of more than 30,000 units a month.
The tepid response underscores ongoing challenges in winning back market share in China.
Audi's sales in the country fell 5% last year to 617,514 vehicles, and the broader Volkswagen group saw an 8% drop.
The decline is even more pronounced among fully-electric vehicles, where sales cratered by 44%.
Despite the precarity, China's significance as the world's largest auto market means it remains crucial for many global brands.
The country is VW's biggest single market, accounting for roughly 30% of total group deliveries last year, and 38% for Audi.
In an effort to boost sales, the SAIC-Audi joint venture recently launched an incentive program which includes a tax subsidy, cash rebate and trade-in premium that, combined, cuts the price by 30,000 yuan (RM17,139).
It's also offering customers the option of flexible financing options, such as five-year interest-free or seven-year low-interest loans.
The E5 Sportback's win as China Car of the Year award is encouraging and Audi is committed to its China strategy, focusing on a dual-brand approach with more new models due this year, the company said.
Cars like the Audi E5 Sportback "are at the forefront of the competition," VW Chief Executive Officer Oliver Blume said in Berlin in January.
"The vehicle is profitable and attracts precisely the young and tech-savvy customers we want," VW's China head Ralf Brandstätter said at the same event.
Those credentials are facing intense scrutiny in China, where consumers are especially discerning about technology and value. Beyond the bugs identified by Shen, some buyers are being put off by what they perceive as a lack of bang for their buck.
One key issue is the E5 Sportback's charging time, which sees its 800-volt architecture needing 15 minutes to add 350km.
That compares with 10 minutes for 400km on the 279,900-yuan (RM160,000) LS6, a compact SUV made by IM Motors, a joint venture established in part with SAIC.
Audi also drew the ire of early E5 Sportback adopters in November when, just months after the model's official launch, it released a special variant with upgraded features from tires to air suspension.
Some existing owners took to social media to criticize the move as a panic upgrade and a betrayal for loyal fans.
Next up for the China market is the Audi E7X, the series' second model which is set to make its official debut at this year's Beijing auto show in April.
The carmaker has previously said it has no plans to export 'in China, for China' models like the E5 Sportback, which sparked envy in Europe for the comparatively low price of its top-spec version.
