Transportation

Audi’s Future Hinges on Winning Back China

The German carmaker is trying to improve sales in China with new models and local partnerships.

An Audi launch event for the A6L e-tron in Changchun, Jilin Province, on April 10.

Photographer: Xu Chang/Xinhua/Getty Images

Audi has lost its way, and nowhere is the problem bigger than in China.

The Volkswagen AG brand is heading for its third straight year of declines in the country after falling behind on design and technology. Once accounting for about 70% of cars used by Chinese bureaucrats, Audi risks getting outsold by Xiaomi Corp., a Chinese phone maker that started selling cars only two years ago. Even the showpiece SUV Audi will unveil at the Beijing auto show this week relies on technology from local partners — a marked pivot for a company built on German engineering leadership.