Despite the luxury car market growth in India has been the slowest, Audi India has recorded a significant growth in recent time mainly banking on the entry-level sports utility vehicle Q3.
The company is confident of maintaining its growth momentum, although its competitors are now coming up with entry-level cars. Michael Perschke, Head of Audi India, speaks about the compnay's road ahead, in an interview with Probal Basak.
Audi India has so far sold 6,417 units in the first nine months of this year, as against 4,210 units in the year-ago period. Given the negative factors like rising fuel prices, increase in registration taxes in various states, where do you see the numbers by the end of 2012?
The overall market scenario is challenging. Rising fuel prices, depreciating rupee, changing registration taxes in various states, reduction in retail loans and speculation on higher duty on diesel cars, together have a negative impact on automobile industry. However, we are constantly enhancing our product line, increasing our network and creating wider brand awareness. This is creating a larger customer base for us. We had set a goal of 8000 cars sold by the end of this year. But we are confident of achieving our target even before the year ends.
There were some talks about price hike after the festive season. As the rupee seems to be stabilising now around 52-53 levels, is there any possibility of reconsidering the decision of price hike?
We are still in the process of evaluating price revision possibilities across the range. As of now, we plan to increase our prices across model range.
Even though the luxury car market in India has grown at the slowest pace, Audi has recorded significant growth in recent years mainly banking on the entry-level sports utility vehicle Q3. Now your competition like Mercedes, whom Audi India has pushed to the third position, is also coming up with cars priced below Rs 20 lakh. How confident you are to maintain the leading position in the longer run?
By 2015 We aim to be the No one luxury car brand in India and by 2020 Audi aims to sell more than 50,000 units in India. With the strategy of building a strong brand, a high quality network and a strong product portfolio we are confident about our growth in India. Audi is one of the fastest growing luxury car brands in India and we are making a clear long-term statement in the country with ambitious growth plans. Audi Q3 offers an entry-level, yet luxurious SUV to our customers. We are extremely happy with the response the Audi Q3 has generated in the Indian market. The initial order of 500 was sold-out at an unprecedented five days of opening of bookings.
Are cheaper models the future of luxury car makers in India to drive volumes?
We at Audi are offering our customers various mobility choices across segments. But our core value is to offer best engineered cars with latest technology and attractive design. There is not a focus on offering “cheaper” cars. Audi Q3 is an entry level luxury SUV. The emergence of a more ambitious middle class with increased purchasing power, that understands values and aspires to own a luxury brand like ours, is significantly contributing to the transformation of the luxury landscape in India.
How far can Audi India go down the price ladder?
We follow the top-down strategy for India and that has worked very well for us: A8L, A7, A6, A4 / Q7, Q5, Q3. Our customers are able to identify with our brand equity, which drives on sportiness, progressiveness and sophistication. This is fuelling our growth in India. Our customers recognise the intrinsic brand value and are willing to pay for the features we are offering in our cars.
Globally, we offer, Audi A3 and Audi A1 at the entry-level. But currently we do not have any plans for these models in India.
Are India-specific cars one of the options Audi might look at in future?
India is a key strategic market for Audi globally and is in the league of top 5 European markets. We are a global brand and believe that everyone should have the same chance to experience global products.
Dealership network is perhaps one area where Audi India is lagging behind competition. What are your plans for expansion of your dealership network in future?
We believe in reaching our customers, wherever they are. So we are constantly thinking how to increase our presence and be in touch with our customers. We have recently opened a dealership in Goa taking our strength to 21 dealerships. Further developments include Kanpur and Lucknow which will improve our dealer strength in Uttar Pradesh. We aim to open 25 dealerships by year end.