Audi Korea's dealership struggles with falling vehicle sales

Audi's flagship A6 sedan / Courtesy of Audi Korea

Audi Korea's dealership is facing declining sales of the once highly sought-after German luxury vehicles, casting doubt on the carmaker's prospects of a potential rebound in the near future, according to data and industry officials, Tuesday.

Last month, Kolon Mobility Group decided to provide financial aid worth 2 billion won ($1.46 million) to the cash-strapped Kolon Auto, the authorized Audi dealership here, according to a regulatory filing reported on the Financial Supervisory Service.

The decline was triggered by the dealership's increasing losses due to the carmaker's weakening brand identity and plummeting auto sales.

According to data from the Korea Automobile Importers and Distributors Association, Audi Korea's combined sales between January and August this year came in at 5,534, down 56.4 percent from the previous year.

The carmaker was once regarded as one of the top three German luxury automakers in the market, alongside Mercedes-Benz and BMW.

In August, the carmaker sold 1,010 vehicles, losing more ground to other imported vehicle rivals, such as Lexus and Volvo.

However, the company has, in recent years, failed to compete with its rivals mostly due to a lack of new vehicle launches. Even worse, the carmaker's service and repair centers are on track to shut down their operations here.

The number of the carmaker's authorized service centers nationwide reached 40 as of the end of 2023, but the figure fell to 35 in July. This was inevitable from the perspective of the carmaker's dealerships, as they have to focus on maximizing their management efficiency amid the brand's steeply falling sales here.

Audi Korea set a sales target of over 31,000 vehicles for 2023 but ended up selling fewer than 18,000 cars. According to an estimation by Audi Korea's dealerships, the local subsidiary of the German automaker reported a loss of 116.3 billion won last year.

"The focus should be on how Audi Korea will be able to recover its overall brand value," an industry official said.

"BMW drastically lost its reputation due to repeated fire reports from its flagship sedan back in 2017, but successfully regained its glory now. Audi Korea should also focus more on enhancing its brand value and stick less to its sales figure."