Executive Summary China’s auto market has been the target of every car manufacturers in the world. The number of vehicles sold in China is increased to 19 million, which allows it to surpass America to become the largest automobile market in the world, together with an average consecutive growth of 6 percent through 2020 (Accenture, 2012) (See Appendix B1). As for the luxury car market, China has increased at a noticeable rate of 36 percent a year in the last decade and McKinsey predicted it would grow at an annual rate of 12 percent through 2020, which is faster than overall passenger car market (McKinsey&Company, 2013)(See Appendix B1). In recent years, local brands also gain optimistic growth by manufacturing cars that are more suitable for local. Hence, Audi, as a foreign brand, will gradually lose its competitive advantage. In this report, an external analysis will be conducted to see if there are any threats and opportunities for Audi, and followed by a detailed demographic analysis to evaluate if Audi can give correct and prompt response to the prompt changes. Finally, a recommendation will be given to advise how Audi can maintain its leadership position, according to the analysis. Part 1: Overview of external business environmental factors by PESTLE-C Analysis In the ever-changing society, it has added difficulty for automotive players to maintain growth including Audi. Hence, PESTEL model, which was first conceived by Agular as ETPS (Economic, technical,