Audi is on a roll with the global sales of 9.5 lakh cars last year, clocking 9.8 billion euro revenue, making it one of the most profitable car manufacturers in the global luxury automotive horizon. Audi, with five manufacturing locations, is active in well over 100 markets across the globe and takes on the players including Mercedes-Benz and BMW. What is more, the firm is aiming at superceding its German peers by 2016, says an Economic Times report quoting its India head Michael Perschke as saying.
The 42-year-old German himself drives an SUV, knows the pulse of the Indian market having worked with Mercedes-Benz India for a few years before joining the Volkswagen group in 2004, the report points out.
The Audi group plans to invest 5.5 billion euro mainly in new products to maintain its lead in technology, enshrined in the slogan Vorsprung durch Technik. The philosophy has helped Audi sell 1,876 cars during January-August this year, surpassing total sales of 1,658 cars last year. “Having successfully surpassed last year’s annual sales, we are confident of taking our sales to new highs, leveraging on the growing demand for luxury cars from Indian consumers,” the report quotes Perschke as saying.
With developed economies yet to fully come out of the woods, premium carmakers are increasingly looking at emerging markets like India to shore up revenues and improve profitability and Audi is no exception, the report says. Audi has started assembling Q5, the compact crossover SUV, at its Aurangabad plant in Maharashtra and the capacity has been ramped up to make up to 1,500 SUVs per year for the Indian market. The A4 and A6 sedans are already being assembled in the country.
Audi does not have the first-mover advantage, says the report and adds: Audi was the last to enter Indian luxury car market in 2007, after Mercedes began its journey in 1995 and BMW in 2006. Together, these companies sell around 11,000 cars a year. But the German carmaker hopes to catch up, leveraging on the rising demand in the buoyant Indian economy, as demand for cars is fast outstripping supplies, forcing car manufacturers to add capacities in the world’s second-fastest growing market.
“We are aiming at increasing our market share as well as focusing on profitability. By next year, we are targeting about 30 percent share of the Indian market. We expect a huge growth from the metros as well as Tier-II cities. So, more showrooms are on the anvil in cities such as Surat, Lucknow, Ludhiana, Indore and Coimbatore,” Persche told Economic Times.
The report cites the firm as claiming that Audi had customised its cars for long-distance driving on Indian roads. It has also been expanding its service network and opened half a dozen new outlets this year. It is also establishing second facilities in bigger cities such as Delhi and Mumbai, the largest markets for such cars. Dealers, who are reaping profits, are being asked to reinvest into the business.
“This is fair enough as they have worked hard to build the brand and a credible base of customers. Sales can be created, but it may at times damage the brand. We are not in a rush and would cushion our partners (read: dealers) sentiments and maintain our brand lineage,” the report quotes Persche as saying.
The Audi India strategy encompasses substantial investment in branding, marketing, exclusive dealerships and after-sales service for the coming years. “We plan to increase the dealer network in India from 10 to 18 this fiscal year and launch the next generation of topend saloon models like the A8 by the end of this year that would have a host of features like a standard Google map not available in competing models,” adds the report quoting the Indian head as saying.
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