Audi Swot Analysis

The history of Audi began in November 1899, when August Horch established A. Horch & Cie. Motorwagen Werke in Cologne, Germany. After troubles with Horch chief financial officer, August Horch left Motorwagenwerke and founded his second company, Audi, in Zwickau on 16 July 1909. In 1932, Audi, Wanderer, DKW and Horch were merged to form the Auto Union AG which was located in Chemnitz, Saxony. In 1945, the company’s entire plants were completely dismantled by the Soviet forces as part of war reparations. A new headquarter was established in Ingolstadt, Bavaria and the company was renamed as Auto Union GmbH by September 1949. In 1959, Daimler-Benz AG acquired Auto Union GmbH. Daimler-Benz sold Auto Union GmbH to Volkswagen AG, another German car

Thus, there was a strong market potential for foreign carmakers. China’s urbanization as well as the country’s huge investments in infrastructure offered vast long-term opportunities to the car industry. The Chinese government provided foreign carmakers protection and other privileges in order to attract investment in the automobile sector. With a growing disposable income, the consumers in China became increasingly interested in purchasing high-quality luxury goods, which also served as a symbol of their status and success. As the car industry in China lacked the necessary expertise and know-how to manufacture high-quality automobiles, the entry to the Chinese market by existing world-class automobile manufacturers like Audi seemed to be predetermined.

The aim of the Chinese government in terms of its policy in the automobile industry was primarily to encourage the development of its domestic car industry. A possible threat of the market entry could be, that the Chinese government's policies force foreign companies like Audi to give the domestic car manufacturers access to their technology and know-how, so that these companies could compete better with the market. Moreover, the threat exists, that in a joint venture between foreign and Chinese car makers the Chinese government could set specific regulations to foreign companies which limits

In the same year, already 499 Audi cars were assembled at the FAW plant in Changchun. On 13 August 1988, Audi AG and FAW signed the contracts for the production of the Audi 100 under license in Changchun. In that year, the assembly of the Audi 100 from imported parts kits as well as the establishment of an after sales support unit began at the FAW plant. FAW and Volkswagen, Audi’s parent company, formed a joint venture in 1991 and established a separate assembly line with an annual production capacity of 150,000 units in Changchun. Audi joined the joint venture of FAW-VW in 1995 and became a ten-percent shareholder, while VW held 30 percent and FAW 60