German luxury car manufacturer Audi has expanded into Cambodia, joining the recent entry of higher-end automobile producers into a small but growing market.

At a signing ceremony in Phnom Penh yesterday, Audi AG appointed Automotive Asia (Cambodia) Ltd as its official distributor in the country. The distributor is a subsidiary of Automotive Asia, the Audi importer in Vietnam.

Sales will start in mid-2014 after a 2,200-square-metre showroom and workshop is built on Monivong Boulevard. Speaking at the still-empty site yesterday, Christine Rudolph, Audi AG dealer development manager, said it was the right time to enter Cambodia.

“I’m really sure that Audi Cambodia, together with our importer, Audi Vietnam, will be the great success story in Cambodia,” she said, adding in a later email that, “a healthy market requires competition”.

And competition exists. A handful of brands are seeking a foothold in Cambodia’s tiny luxury car market. Besides Mercedes, which has been sold for decades, Bayerische Motoren Werke, or BMW, opened a showroom at the beginning of this month in Phnom Penh through a contract with Cambodia’s Royal Group, and Porsche announced plans earlier this year to open a full sales, service and spare parts facility by mid-2014.

Laurent Genêt, chairman of Automotive Asia in Cambodia, said the local scene is comparable to Vietnam’s six years ago, where a small market was shared by many competitors but still turned out to be successful.

He said Audi’s presence in Phnom Penh also differs from its competitors, because “we are the only luxury brand which came to Phnom Penh central city. We are the only one who is not at the airport. So we have a very different approach to luxury cars and people will see it through the place, the facility, when we open.”

But challenges remain, he said, such as locating the right middle management and hiring mechanics who know Audi cars well enough to do repairs.

Peter Brongers, chief executive officer for the local BMW distributor, said yesterday that with a developing middle class, Cambodia has “more and more people who are able to afford it [a luxury car] and more and more people who understand that buying a car from an official dealer… is simply much safer”.

Brongers said he welcomes competition, but the deal with Audi comes after BMW’s, “and in my opinion, that’s where they will always be, second after BMW”.

According to Genêt, Audi is the fastest-growing luxury car brand worldwide, selling almost 1.5 million vehicles globally last year.

Data from the Ministry of Commerce show that Cambodia imported 440,318 vehicles, including motorbikes, in the first six months of this year, down 17.8 per cent compared to same period of 2012.