Michael Perschke, managing director of Audi India, is riding high on the success of Audi in India. Having displaced world leader BMW to claim the numero uno position in the luxury car market in India, the company is confident of achieving 35-40 per cent growth in sales this year against an industry expectation of 10 per cent. In an interview, he speaks to Swaraj Baggonkar about the company’s plans and expectations. Edited excerpts:
Some senior executives from the industry say the luxury car segment is not expected to grow more than 10 per cent this year. What are Audi's expectations?
The overall market scenario is challenging. Rising fuel prices, depreciating rupee, changing registration taxes in various states, as well as reduction in retail loans, have severely impacted the automobile industry, but, in spite of these challenges, we are confident about our growth in India.
With a slew of new product launches — Audi TT, A4 and Q3 — we are still maintaining our forecast and will achieve our sales target of 8,000 cars for 2012.
While our core competition is stagnating and they are revising their sales targets downwards, the segment is still growing and the Audi brand is proving to be a strong growth driver in the segment. Total luxury car market is growing by 5-10 per cent, but we have seen a greater positive customer buying behaviour for our cars and are confident that Audi will see growth of at least 35-40 per cent this year.
Luxury car sales growth has gone down, but has the number of inquiries, too, subsided?
We have continued to perform successfully in India. We have registered a growth of 43 per cent during January to June, delivering 4,000 vehicles, compared to 2,802 vehicles delivered in the same period last year. We are seeing a very positive growth for Audi, thanks to our strong product line-up and successful introduction of Audi A4, Audi TT, etc. In addition, the overwhelming demand of the recently launched Audi Q3 will encourage a further boost in our sales figures. The success of Audi Q3 is setting the speed for us to race ahead towards our next level of growth in India. We have already completed the first round of bookings, where we received a tremendous response and saw 500 bookings within five days of the launch.
What is the strength of dealer and service workshop presently and the target?
We plan to expand our network to 25 dealerships by the end of 2012 from the existing 19 centres.
Presently, out of the 19 dealership centres, we have 18 service workshops, operating across India. We recently opened new showrooms in Bhopal, Coimbatore, Nagpur and Delhi West. Last year, we opened new showrooms in Delhi South, Chennai, Ludhiana, Surat and Indore. We will have further developments that include Lucknow, Goa and Mumbai South among others.
Has the slowdown reached a stage where you need to offer discounts on it?
We like to give incentives and benefits to our customers by way of attractive service offerings, insurance, finance and complete ownership experience under Audi Car Life programme. Audi represents class and aspiration and we do not want to lose either in the quest for numbers. Our customers recognise the intrinsic brand value and are willing to pay for the features we are offering in our cars.
Are you making any fresh investments?
We have announced an investment of Euro 30 million (around Rs 200 crore), at the start of our operations, out of which around Euro 20 million has been utilised so far. We have a clear long-term strategy in the country with positive growth plans.
Do you expect to maintain your market share? What is it presently?
In 2011, Audi had a segment share of 26 per cent in the luxury car market, which has increased to 32 per cent this year, before the introduction of Audi Q3. With Audi Q3, we are sure we would be further able to not only consolidate our segment share but grow it, too. We are the market leader in super sports car segment with the Audi R8 V10, Audi R8 Spyder and Audi RS5. For the fourth year in succession, Audi has not only achieved, but also exceeded its projected sales targets.