FRANKFURT— Audi AG will significantly exceed its sales target in China this year and expects the country to outpace its German home turf as its largest single market in 2012 or 2013 at the latest.
The projection underscores a broader geographic shift among auto makers toward Asian growth markets.
"Today we're at 118,000 car sales already. We're on track to significantly surpass our initial target in China this year" of selling 130,000 cars, said Peter Schwarzenbauer, Audi's executive board member responsible for sales and marketing, in an interview.
He said the Ingolstadt-based company will launch its A3 hatchback in China next year as part of a wider move to attract a broader customer base there, in addition to the new Q5 small sport-utility vehicle, which is being rolled out globally.
Audi ranks third in global luxury- car sales behind BMW AG and Daimler AG's Mercedes-Benz. But it keeps a firm grip on the top position in China, which it gained thanks partly to the early market entry of its parent company, Volkswagen AG.
Mr. Schwarzenbauer said annual sales in China might soar to 250,000 cars by 2012 or 2013 as Audi is preparing to launch several new or revamped models, ramping up local production and expanding its dealership network.
He said Audi also plans to establish a broader leasing and financing business in China to tap rising customer demand. Most Chinese buyers tend to pay cash for their vehicles.
China has proved to be one of the few bright spots for luxury-car makers after sales collapsed in other major geographies amid the economic downturn. Demand has been backed by a government stimulus package and tax break.
A move to halve the purchase tax on autos with 1.6-liter engines or less to 5% has fostered demand, particularly for smaller cars.
In the January-August period, passenger-vehicle sales in China rose 37% to 6.23 million, according to the China Association of Automobile Manufacturers, while total vehicle sales rose 29% on the year to 8.33 million.
Some analysts have voiced concern that the tax break advanced future demand and sales may collapse when it expires. Mr. Schwarzenbauer said Audi "sees no signs" of an imminent market slump. He noted that the premium segment in China still accounts for only 5% of the overall market, but is expected to grow to around 8% by 2015, with the overall market rising to between 12 million and 14 million annual vehicle sales by then.
He said he regards BMW as the company's main competitor looking forward, due to a similar positioning of the brand, with Toyota Motor Corp.'s Lexus brand competing more directly with Mercedes-Benz.
Audi steered through the industry gloom better than its peers and narrowed the gap with its larger rivals BMW and Mercedes-Benz, mainly due to new products, its large footprint in China and a relatively small exposure to the troubled U.S. market.
Mr. Schwarzenbauer confirmed that Audi will slightly exceed its global sales target of 900,000 cars this year, possibly by around 20,000 vehicles. He said Audi's global sales are poised to rise again in 2010, including growth in Europe and the U.S., but said it might take "two to three years" before reaching the one million threshold from last year again.
Mr. Schwarzenbauer said Audi currently has no plans to bring its new small A1 model, which is due to be launched early 2010, to the U.S. and China. But the company might launch the second generation of the A1 in these two markets, possibly including electric or hybrid versions.
He said Audi's U.S. sales are expected to come in at around 80,000 vehicles in 2009 after 86,000 last year, slightly better than the initially anticipated decline of 10% on the year.
Mr. Schwarzenbauer said he sees significant sales growth in the U.S. next year, driven, for example, by the small Q5 SUV, as the country's economy is expected to rebound faster than other major markets. But he said he doesn't believe the U.S. market will return to levels of between 16 million and 17 million vehicles again because these levels were fueled by "extreme incentives" granted by Detroit's Big Three at the time.
Mr. Schwarzenbauer said he expects the U.S. market to return to between 14 million and 15 million annual vehicle sales in the mid-term, with the premium segment accounting for about 10% of the overall market.
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