About one in every three Audis sold new last year was purchased in China. That’s almost three times as many cars as were sold in North America, or about as many cars sold in all of Europe. China is important.
The company’s plan last year was to try to start a bit of a reset, with a new sub-brand. The name of this new Audi offering? AUDI. It’s just Audi, uppercase, and without the rings. It turns out that silly marketing can’t fix serious problems. Oops.
While we’re on the topic of Spider-Man pointing to Spider-Man, Toyota’s Toyoda looks like it’ll finally be able to buy Toyota Industries, which is a company that’s not totally owned by Toyota.
In less recursive news, there’s another war on, and the impacts could be small, or they could be huge. No one knows anything. That’s not entirely true. UAW workers at Stellantis know exactly who to blame for the loss of bonuses for 2025.
Adventurous Adopters Aren’t Appreciating Audi’s Audacious AUDIs
If it seems like I’m constantly harping on Audi, it’s because the brand is important and there’s no reason why it has to be a failure. If you’re a member of the four-ringed faithful, perhaps 2025 represents the bottom.
Sales were down 3% globally to 1.6 million vehicles, led by a 5% drop in China to about 618,000 vehicles. One of Audi’s big plans to compete with the rapid adoption of well-liked, tech-forward domestic options was a new brand: AUDI. That’s Audi, but with no rings and the caps lock key engaged. The first AUDI is the E5 Sportback.
This is a locally-built car developed in conjunction with long-time Volkswagen partner SAIC. It’s an attractive five-door wagon with specs that are, if not better than what the best China has to offer, at least closer.
It only went on sale last year, but thus far, it hasn’t exactly set the world on fire. As Bloomberg reports, sales numbered just 605 in January. That compares to about 8,000 Model 3s and more than 20,000 Xiaomi SU7s.
Bigger than that, the vehicle is predictably plagued with issues, according to one owner who spoke to Bloomberg:
“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 ($34,000) and 319,900 yuan.
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.
(Note: the “engine” thing is a mistake; Bloomberg is going to fix it.)
The E5 Sportback did win the China Car of the Year award, and it’s still early days. A lot of the bugs can be worked out eventually, although other issues, like slightly slower charging speed, probably cannot.
Either way, it seems like AUDI isn’t the silver bullet Audi needs.
Toyoda Triumphs, Toyota Takes Toyota
I haven’t been reporting much on the back and forth of it all, but the original company that Akio Toyoda’s grandfather founded, which eventually became Toyota the carmaker, is a textile company called Toyota Industries, and Toyota Group really wants it. Why? It’s a textile company that also makes hybrid components and forklifts.
There was only one obstacle: Elliott Investment Management. The American-owned activist investor owns the largest independent chunk of the company, and it’s long accused Toyota Group of trying to muscle the company out for too low a price, given how profitable Toyota Industries is.
Stubbornness works! Toyota is going to pay $132 per share, which is way more than the original $104 offer. As Automotive News points out, this is part of a larger trend of minority shareholders trying to exert more influence on Japanese companies:
The privatization also addresses a complicated parent-subsidiary relationship between Toyota Motor and Toyota Industries as investors and regulators increasingly frown on cross-holdings.
The cross-holdings bind allied Japanese companies through business and capital tie-ups in a structure known in Japan as the keiretsu system. Critics say it introduces corporate governance issues such as conflicts of interests and opaque financial relationships, while also locking up capital that could be better invested elsewhere. The system also tends to ignore minority investor input.
It’s a big win for Toyota and Toyoda as the company is probably worth more than what they paid for it.
Carlos’s Choices Confound Chrysler-ites
The combination of tariffs and poor leadership has resulted in UAW workers at Stellantis being deprived of bonus checks, after getting up to $14,000 just two years ago. While the tariffs are a big part of it, the bad choices ex-CEO Carlo Tavares made seem to be getting most of the attention from workers who spoke with The Detroit News:
Reactions on Thursday varied by plant. At Sterling Heights Assembly, where workers have been recently working long hours to churn out Ram 1500 pickups, a letter to members from Local 1700 President Michael Spencer indicated workers were fed up. He told them they “will not be walking out on a wild cat strike,” and urged them to keep building “the best quality vehicles possible.”
“I do want to express the disappointment of the thousands of UAW Members who come to work every day and deserve better from Stellantis Corporate leadership in their decisions, product planning and fiduciary responsibility,” Spencer added. “Corporate greed drove the decision to offshore production, cut jobs and speed up production lines.”
If there’s any silver lining here, it’s that workers seem to think the new guy is a lot better than the old guy, and there appears to be an appetite to give him a chance.
Alliteration Is A Little Too Glib For This One
Oh, right, I started the alliteration thing and then realized I didn’t want to do it for this story. There’s a war going on, or police action, or whatever it’s being called. It’s nominally between Iran and the United States/Israel, but it’s inflamed the entire Middle East.
In light of the real threats and human suffering, the possible impact on the automotive world seems less important. That all being said, the automotive world has endured one supply chain shock after another since 2020, and any time it seems like things are cooling off, something else happens. This counts as something else.
The big questions are: How long will this last, and will the strategic Strait of Hormuz stay closed? Without answers, whatever happens next is just speculation. Still, as Automotive News reports, the industry is keeping a close eye on it.
It might be nothing, but here’s the logical worst case:
David Whiston, an equity analyst at Morningstar Research Services, told Automotive News that the struggle to ship oil and other automotive components out of the region could add to the industry’s growing affordability crisis.
“That just adds more inflation to making a vehicle, which is already battling tariff costs,” he said.
Long-term, Whiston worries about a broader impact to the economy and potential recession.
“If the war is prolonged, then it’s a question of does it cause U.S. business to freeze spending which will in turn lead to a slowdown, if not recession and layoffs,” he said.
Fun times.
What I’m Listening To While Writing TMD
You’re the first to learn that, if you become a member in March (or upgrade an existing subscription), you’ll not only get 10% off your order, you’ll also be entered into a drawing to be added to a group chat with your favorite Autopian authors in April. The bit I wanted to do for this is use a screenshot from “The Telephone Hour” from Bye Bye Birdie, but everyone told me that was weird. Either way, follow this link or use the code groupchat at checkout.
The Big Question
What’s the best automotive sub-brand, and why is it Merkur?
Top photo: AUDI
What’s the best automotive sub-brand, and why is it Merkur?
Right now? GR
I’m not an expert in the Chinese car market. But AUDI just seems to be trying to copy local brand trends, and chasing trends tends to mean you’re always behind. I assume that the appeal of Audi to consumers is that it was an upscale foreign brand. Making it more Chinese-like takes away that appeal, at least in my eyes.
And god does that design ever SCREAM “generic.”
Speaking of Toyoda…. we did a two week trip to Japan in 2024 that was amazing. I had one request and that was to go to a Japanese manufacturer’s auto museum. The closest one was in Nagoya (a very cool place) and so we got tickets for the Toyota Commemorative Museum of Industry and Technology.
It starts with a semi working display of the innovative circular loom that Toyoda developed which was really cool. A whole section on looms and textiles which was more interesting than it may sound. They brought you through how Toyoda got into the car business by reverse engineering a 1933 Chevy. You learn about how they were cracking engine blocks and almost gave up. And the vintage Toyotas were spectacular… particularly a gorgeous white 1967 2000GT. Go there if you can!
https://www.tcmit.org/
“There’s a war going on, or police action”
Compared to this Pearl Harbor was a police action.
I’m no expert on international law but it seems to me intentionally targeting and killing the leadership of another country is as “act of war” as acts of war get. If not it’s a damn dangerous precedent.
If they liked it they should have put a ring(s) on it.
Audi’s frequent self-inflicted wounds are exhausting. Thinking the country that pretty much made light up badges a thing would want an Audi sub-brand called AUDI but without the very famous, immediately recognizable Audi badge is so effing stupid it hurts.
The big boy Japanese companies definitely have some recursive business.
I used to work for Sumitomo Rubber and I once had a Sumitomo Heavy Industries gearmotor airfreighted to me via Sumitomo Air Cargo, which was paid for via Sumitomo Mitsui Banking Corporation and insured by Mitsui Sumitomo Insurance.
Fun things can happen when your employer is that big and has that much sway on suppliers.
My favorite sub brand is scion followed by geo and then opel under Buick. I wish Toyota would bring Daihatsu in as a sub brand. I don’t think there has been a better time.
You mean a luxury brand trying to sell it’s products without the thing that makes them a luxury these days?
That’s like selling a Louis Vuitton purse without the famous LV logo, or a Chanel perfume without the CC plastered all over it. At the end of the day, the vast majority of these “luxury” goods these days are just overpriced garbage with a recognizable logo. Take that away and you just got something that does not deserve a premium price.
The whole AUDI thing never made sense to me. China is flooded in New automakers and you want to make it just different enough so people don’t have brand recognition. It’s a hail mary and shows just how desperate vag is in China. With vags extensive nameplate collection it doesn’t make a ton of sense either. Why not use an old auto union logo or something if you really want to make it different for some unknown reason.
If VAG loses China, they are toast. They are going the way of the dinosaur.
I don’t see them winning in China they would be best to do like GM did in many markets and make a strategic exit. They have Europe for now. They have partnerships in China they can probably still generate something from. They don’t have much appeal in Asia. They had Singapore for a bit but just in luxury segments. Not exactly a huge market especially being right hand drive.
I really don’t understand how they expect people to see “AUDI” as different from “Audi”, any more than, say, Ford and FORD would be. Its completely asinine, either create a new brand or don’t
There is a way that it makes sense: it allows the existing global Audi lineup to keep catering more to global tastes (and there’s still plenty of Chinese customers who buy Audis specifically for that) while also having something available to cater to local Chinese tastes without risk of ruining the global models (further). The problem with the E5 is that due to the engineering decisions made by SAIC when making the IM L6 platform it provided to AUDI, it has poor pretty poor interior space in the rear seat and trunk area, the former of which is super important to the Chinese market. Ironically it’s the stretched LWB global Audi lineup that doesn’t have this problem.