When Junko Toyota walked over, Li Li leaned toward Heifeng with a grin and said, "President Lu, this young lady's impressive." He coughed, corrected himself, and asked how they'd met, half-joking that when he was younger, he'd been a famous heart-throb for miles around. Heifeng shot him a look and made a proper introduction. "This is Ms. Junko Toyota, head of Toyota Motor's operations in China." He then went around the circle, introducing the presidents from the domestic brands one by one. A few of the old hands discreetly gave Heifeng a thumbs-up afterward, as if to say: Nicely done, President Lu flying the flag.
The greetings came quickly. "Hello, Ms. Toyota, I'm Li Li." "I'm Li Changcheng." "Hu Yong." The group of seasoned executives all but crowded around, warm and eager. Heifeng could only rub his brow and explain to Junko that these were China's leading auto brand presidents, perhaps latecomers compared with the global giants in scale and strength, but a lively, capable bunch nonetheless. Junko remained impeccably polite, smiling as she greeted each of them.
Li Li waved toward the empty seats. "There are no outsiders here today. We're rarely all in one place. If you're interested, Ms. Toyota, join us for a chat." Junko glanced at Heifeng as if asking for his read. The look made him chuckle inwardly. She was shrewd, constantly weighing the room and using every factor to her advantage. With several domestic heads watching him expectantly, Heifeng could only nod. "If you don't mind, sit with us." "Then I'll accept your kind invitation," Junko replied. She said a few words to her staff and took the chair beside Heifeng.
Across the hall, Honda Koinu had seen the exchange. His expression darkened. In front of him, Junko was all reserve; with a Chinese executive, she seemed far more open. He tamped down his temper. This was the inauguration site of an official association, not a place to make a scene. He whispered to his aide, "Yamamoto, who's the man next to Ms. Toyota?" "Honda-san, that's the Audi chairman you mentioned, Lu Heifeng." The name made Honda's jaw clench. In his view, this was the man behind Honda's slump in China. He stared for a moment longer, eyes cold, and said nothing.
An hour later, with the last corporate presidents seated, the government officials arrived. This new Automotive Association had been spearheaded by the Ministry of Industry and Information Technology, with several agencies jointly supporting it. When the meeting began, Ye Guohua, serving as the association's first chairman, laid out its purpose in clear terms: to set service standards for all automakers operating in China, whether domestic or foreign. The emphasis was on cleaning up sales practices at 4S dealerships. Mandatory add-ons and forced consumption would be prohibited. Fee schedules would need to be posted publicly, remain transparent, and comply with Chinese law and regulations. In return, compliant companies could expect measured policy incentives, tax relief here, and administrative support there to ensure the industry's overall health and development.
No one argued. The auto sector's tax burden had been heavy for years; trimming it appropriately now would steady nerves and stabilize investment. Foreign brands in particular were skittish, wary of becoming "the next cautionary tale." With the government signaling a balanced, rules-based approach to punish predatory behavior, reward compliance, the proposal looked like a win-win. The discussion stayed calm, and the ceremony wrapped in a matter-of-fact way with Ye Guohua presiding. Afterward, he lingered to exchange a few words with several brand heads before departing.
Once Ye had gone, Li Li latched onto Heifeng again. He insisted that since they were in Yanjing, they couldn't leave without sampling the city's famed nighttime diversions, the sort of "paradise on earth" people joked about in private. A few other presidents perked up at the suggestion, clearly no strangers to that scene. Laughing and talking over one another, they tugged Heifeng along for an evening that promised to be extravagant, if not exactly restful.
Elsewhere in the city, a quieter, more strategic gathering was underway at the home of Xin Ke Paul, the regional chief for a major German luxury marque. Seated with him were the China heads for two other European brands, as well as Volkswagen's regional lead. When everyone had arrived, Xin Ke Paul opened bluntly. "Gentlemen, the reason I brought you together is simple. We need to pool our strengths and rebuild our brands' influence in China."
The "Baolai" chief shot back first, unhappy and unvarnished. "Influence? Audi's been hammering our C-class. Sales are scraping the floor." The "Otto" executive nodded, resigned. "Right now, if Chinese buyers are shopping for a C-class, they default to Audi. Our three equivalents aren't even in the conversation." The Volkswagen lead added with a scowl, "You think that's bad? Your collective price cuts on the C-class have dragged down our B-class and C-class alike. We're taking it on both fronts."
Xin Ke Paul absorbed the complaints without bristling. When the room finally fell quiet, he answered in a measured tone. "Don't lose sight of the structure of the market. Yes, Audi's shaken up B- and C-class. But above C-class, the field is still largely ours. Our high-end sales have held steady." He glanced around. "We can't pretend the midrange hasn't softened, of course it has. But our flagship segments remain solid, and they matter most to brand equity, profit, and long-term positioning. That's the ground we must not cede."
No one disagreed with the logic. The problem was what to do about it. The price war Audi had kicked off in the mainstream segments had turned buyer expectations upside down. If they followed with blanket cuts at the top end, they risked training customers to wait for discounts, eroding the prestige positioning that underwrote their margins. If they held firm, they risked losing eyeballs and test drives to the brand that was suddenly everywhere. For the moment, they circled the issue rather than striking at it, venting at Audi's tactics and promising to revisit joint marketing and dealer discipline. Outside, the early winter light was fading across Yanjing's skyline. Inside, the four men were still talking, each aware that whatever they decided next would ripple through the next quarter's reports and the next few years of competition with the upstart who had dared to rewrite the rules.
Back near the venue, the domestic presidents were still in boisterous spirits as they drifted out into the night, Junko Toyota's polite smile lingering in a few minds, and the new association's rules already sparking calculations in others. Heifeng, for his part, kept his own counsel. The day had been about setting standards and defining battle lines. The next would be about moving fast inside those lines and making sure Audi stayed one step ahead.