(Yicai) Dec. 11 -- The dealership that was once the top distributor in Beijing for cars from Audi's joint venture with FAW Group has shifted to selling new energy vehicles co-developed by Huawei Technologies and Seres Group.

Beijing Huayang Autong Automobile Sales has removed the Audi sign from outside its showroom and replaced it with that of the Aito marque and Aito vehicles are on display in the window.

Huayang Aotong recently announced that it would no longer distribute cars made by FAW-Audi, but will continue to offer repair and maintenance services for them.

Founded in 2012, Huayang Aotong was an Audi A-class authorized dealer and boasted an Audi city showroom, an Audi maintenance facility, and a FAW-Audi training center. Its Beijing outlet was Audi’s largest 4S (sale, spare parts, service, and survey) store in the Chinese capital.

The rise of Chinese NEV brands has put pressure on the premium market, with luxury car sales falling 8.5 percent to 2 million units in the first three quarters of this year, according to the China Passenger Car Association.

Price cuts by luxury brands such as Audi, BMW, and Mercedes-Benz have squeezed profit margins at dealerships, many of which are now selling at a loss. Dealers have sold Audis priced around CNY350,000 (USD48,315) at a discount of as much as 15 percent, a salesperson told Yicai.

The discounts on luxury brands are as steep as 30 percent, and dealers can no longer bear these losses, said Lang Xuehong, deputy secretary-general of the China Automobile Dealers Association.

Huayang Aotong’s switch to NEVs is not an isolated case as they adapt to the growing market. The largest Audi 4S dealership in Tianjin, Yonghao Aoda, closed recently, and BMW's first ever 5S dealership, operated by Xingdebao Automobile Sales and Services, shut earlier this year.

Moreover, Zhengzhou Zhongsheng Huidi Automobile Sales Service plans to transform its 48 4S showrooms selling luxury cars into 40 Aito user centers and eight Harmony Intelligent Mobility Alliance user centers.

HIMA is Huawei’s most comprehensive and successful cooperation approach with carmakers. The automotive firms cooperating with Huawei under HIMA are BAIC Group, Chery Automobile, Jianghuai Automobile Group, better known as JAC Motors, and Seres.

Editor: Futura Costaglione