The race is on for auto manufacturers and car rental companies to adapt to on-demand ride-sharing and other mobile services. Audi is the latest carmaker to get involved although China could turn out to be a tough market to break into.
Beijing residents may soon be able to rent Audi cars by the hour with the tap of a smartphone, as the German luxury carmaker rolls out the service in Hong Kong and considers introducing the service to cities on the mainland.
China’s capital city operates a lottery to distribute a limited number of license plates to control the vehicle population, and the odds of winning one can be slimmer than playing roulette. The use of passenger vehicles is further restricted to select license-plate numbers on certain days of the week, making car ownership even more onerous.
These conditions make Beijing suited to a service like Audi at home, which allows users to rent an Audi by the hour through a smartphone app, Audi sales chief Dietmar Voggenreiter says. The luxury unit of Volkswagen AG introduced the program in Hong Kong on Wednesday, following debuts in San Francisco and Miami.
“For the ban day, you can use the Audi at home service,” Voggenreiter said in an interview Wednesday in Hong Kong. “It would fit perfect to Beijing.”
In Hong Kong, Audi teamed up with developer Kerry Properties Ltd. to offer the service to residents at the luxury Dragons Range complex, where 90 users signed up to rent at the rate of HK$200 ($26) per hour. There are plans to expand the offering to more points.
The service may appeal to the city’s jet-setters who “aren’t really living 30 days a month in the city but they have to pay 30 days for their car if they own the car,” Voggenreiter said.
On the outlook for China, Voggenreiter said Audi expects sales in its largest market to expand five to 10 percent this year, compared with a 1.4 percent decline in 2015. The automaker is aiming for “healthy profitable growth” and wants to ensure its dealers are at a certain profit level, so it’s not pushing sales with steep discounts, he said.
Dealers are making an average profit of 66 yuan ($10) for selling a premium car in China, compared with 487 yuan in June, after increasing discounts to compete for sales, according to data compiled by WAYS Consulting Co.
Audi sales in China including Hong Kong rose 6.5 percent in the first seven months to 336,580 units, slower than the 11 percent industry gain in passenger-vehicle deliveries.
To contact Bloomberg News staff for this story: Prudence Ho in Hong Kong at email@example.com, Yan Zhang in Beijing at firstname.lastname@example.org. To contact the editors responsible for this story: Chua Kong Ho at email@example.com, Young-Sam Cho at firstname.lastname@example.org, Craig Trudell
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Photo Credit: Audi has launched rent-by-the hour car services in a couple of U.S. cities and Hong Kong and is considering launching in mainland China. Pictured is the 2017 Audi A3 Sportback e-tron. Audi