This photo taken on Aug. 25, 2019, shows an Audi dealership in Seoul. (Yonhap)
SEOUL, March 22 (Korea Bizwire) — South Korean Audi dealers are voicing strong opposition against inflated sales targets, claiming that Audi Korea is igniting a game of chicken among dealers by setting high sales targets without considering market conditions.
According to industry sources, the South Korean unit of the German carmaker set this year’s sales target at about 33,000 units, an increase of more than 10,000 units from a year ago, and allocated sales targets to ten domestic dealers.
The Dealer Council, formed by 8 out of the 10 dealers, recently sent an official letter to Audi Korea saying that it would be difficult to achieve the sales targets due to the economic slump and the deepening of cumulative deficits in the January-February period.
They asked Audi Korea to revise the sales target downward.
Dealers can receive a “target bonus” if they achieve the sales targets set by Audi Korea. To receive the bonus, they must carry out aggressive discount promotions, thus facing a higher financial burden.
As a result of the aggressive sales promotions launched during the January-February period to receive the bonus, dealers suffered a combined deficit of about 9 billion won (US$6.89 million).
“We already lowered the monthly sales targets by dealer last month and this month. There is no compulsion at all since sales targets are set through consultations with dealers,” Audi Korea said.
Kevin Lee (kevinlee@koreabizwire.com)
