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Audi plans to focus the Indian market, including deepening market penetration and increasing sales volume.
German luxury carmaker maker Audi India has successfully navigated the supply chain disruptions that impacted the automotive industry last year and is now looking for growth with improved vehicle availability, launches, electric vehicles (EVs), and pre-owned cars.
In a recent discussion, the company confirmed that while supply chain disruptions previously affected availability, the situation has now stabilised.
“The first half of last year was challenging due to supply chain issues. That's where the decline came from. However, we are expecting a strong year now. We have normal supply now,” said Balbir Singh Dhillon, head of Audi India.
This return to normalcy has allowed Audi to focus on its ambitious plans for the Indian market, which include deepening market penetration and increasing sales volume.
Dhillon expects the luxury car industry to grow by 8-10 per cent this year, reaching roughly 55,000 units and anticipates that Audi will grow at a similar pace.
He hinted at a series of model launches, though he remained tight-lipped on specifics. “There will be more launches coming,” he confirmed.
Audi's Indian operations currently assemble 90 per cent of their vehicles locally, with the remainder being fully built units (FBUs).
The company's manufacturing plant is already capable of scaling up, operating on a single shift but with the capacity to run multiple shifts if demand increases.
A key component of Audi's strategy is its push into the EV market. Dhillon dismissed any notion of slowing down EV development, saying, “There is no slowing down. We are still working on bringing more models to India.”
He acknowledged that the current EV offerings are priced above Rs 1.2 crore and indicated that more accessible models are in the pipeline.
“Hopefully, I will have some news for you in the next few months,” he added, referring to new EV models and price points.
Audi believes EVs will comprise 30 per cent of the luxury car market by 2030, and the company intends to capture a proportionate share.
While some models will continue to be imported as FBUs, the company recognises that local production will be crucial in the long run.
Audi has committed to transitioning its global lineup to fully EVs by 2033, with India playing a role in that shift.
“Our idea is that some of these cars will have to be made in India at some point,” Dhillon explained. “One model at a time will transition from internal combustion engines to EVs.”
The company remains optimistic about the Indian government's EV policies, although final regulations are still pending.
Beyond EVs, Audi is also expanding its pre-owned car business, Audi Approved Plus.
This segment has seen growth, with sales up 30 per cent last year, representing nearly 75 per cent of new car sales volume.
The company expects continued double-digit growth in this area, recognising its importance in attracting new customers to the luxury segment and providing dealers with profitable opportunities.
Audi India has observed a demographic shift in its customer base, with younger buyers increasingly driving demand for luxury vehicles.
“Younger generations are moving from a savings mindset to an experience-driven one, and cars are a part of that experience,” Dhillon noted.
The ease of financing has also played a crucial role, with up to 65 per cent of luxury car purchases being financed.
Another notable trend is the growing presence of women buyers in the luxury segment. Women now account for 11 per cent of Audi's customer base, up from just 1 per cent seven years ago.
Despite India's high taxation and duty structures, Audi recognises the country as a long-term growth market.
The luxury car segment currently comprises only 1 per cent of total car sales in India, with expectations of reaching 2 per cent by 2030.
If this projection holds, annual sales could hit 100,000 units, considerably altering the landscape of India's premium automobile market.
Audi's pre-owned car programme, Audi Approved Plus, has also contributed to its growth strategy.
Customers who purchased pre-owned Audi vehicles three years ago are now entering the upgrade cycle, potentially lifting new car sales.
In 2024, Audi India sold 5,816 units, a 26.6 per cent decline compared to the same period last year.
Meanwhile, Audi Approved Plus grew by 30 per cent year-on-year (Y-o-Y). In 2023, the company registered 89 per cent growth, selling 7,931 units, while the pre-owned business saw a 62 per cent Y-o-Y increase.
In a bid to strengthen its premium sport utility vehicle (SUV) offerings, Audi has launched the new RS Q8 SUV, starting at ₹2.49 crore (ex-showroom).
This luxurious facelift features a powerful 4.0-litre V8 engine, 640 horsepower, and the ability to accelerate from 0 to 100 kilometres per hour in 3.6 seconds.
Feature Presentation: Rajesh Alva/Rediff.com
