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By Bloomberg

Audi AG has abandoned a target to sell 600,000 cars this year in China, its biggest market, as the country’s stock market rout sapped demand for luxury cars, two people familiar with the company’s plans said.

The German carmaker will provide an update on the market situation when it announces first-half results on July 30, said the people, who asked not to be named because the information isn’t public. Audi’s Chinese sales rose 1.9 percent to 273,853 cars in the first half.

“We’re monitoring the market very closely and anticipate further growth in the mid- and long term,” the Ingolstadt-based unit of Volkswagen AG said in an e-mailed response to questions.

Audi had said during the Shanghai auto show in April that its annual sales in China including Hong Kong, which hit 578,932 cars last year, were poised to reach the 600,000 mark for the first time in 2015. Since then, the Chinese auto market has sputtered as economic growth slowed and a stock market in free- fall spooked consumers. Jaguar Land Rover cut its prices and sales targets on Tuesday.

Audi is China’s best-selling luxury-car maker and the world’s No. 2 after BMW AG. It’s also the biggest profit generator at parent company Volkswagen.

Volkswagen reversed gains of as much as 2 percent to fall as much as 0.8 percent in Frankfurt. The shares were up 1.6 percent to 201.1 euros at 9:45 a.m.

Growth in China, where auto sales declined for the first time in more than two years in June, is vital for Audi’s plan to overtake BMW worldwide by the end of the decade. Both companies lost ground in the country last month to Mercedes-Benz, which is also fighting for the top global spot in luxury cars.

BMW Adjusting

BMW has “moderately” adjusted the expansion plan at its plants in Shenyang as the Chinese market is “normalizing,” the Munich-based company said in an e-mailed statement. “We will continue to grow our production volume over the base of 2014 but slowing down the speed of growth.”

Audi’s Chinese deliveries dropped 5.8 percent in June, while BMW sales slipped 0.1 percent. Mercedes sales jumped 39 percent to 32,507 autos.

Mercedes said it still plans to deliver more than 300,000 cars in China this year, as new products help entice customers to the brand. Mercedes pricing was stronger than that of its competitors in China, the Daimler AG unit said in an e-mailed statement.

The country’s auto market has been the key growth driver for luxury-car makers in recent years. The benchmark equity index has declined 22 percent in the past month, the biggest loss among global gauges. Vehicle sales will probably rise at their slowest pace in four years, the China Association of Automobile Manufacturers said Friday.

BMW already cut prices on some models in April, reducing production to prevent a buildup of unsold cars.