Riding on a spike in demand for luxury cars in the domestic market, Audi India is eyeing high double-digit growth for 2023. The German luxury carmaker will be launching a new electric vehicle and is contemplating starting production of electric vehicles in India. Balbir Singh Dhillon, Head of Audi India, spoke to businessline about the company’s plans.
Audi India registered a 27 per cent growth in 2022. What is the expectation for this year?
We will grow high double-digit this year and we aspire to remain in the top three markets for Audi. We will see how it goes as it is beyond our control how other markets respond but with all the lineup available for this year, we will see good growth. The growth with be led by the new Q3 that we have launched along with existing models.
India is the second market in the top three for Audi globally. With luxury vehicle sales in the country, how is it placed for Audi’s global plan?
India is one of the markets where the potential for long-term growth is strong. The luxury car segment is still 1 per cent of the overall segment and with the overall market growth and luxury to 2 per cent, it will give us a positive movement towards growth. India continues to be a critical market as it is growing and growing well. We aspire to remain in the top three markets for Audi AG.
In 2022, the pre-owned car business grew by 62 per cent. What are your expansion plans for 2023?
In 2022, we had 7 showrooms and within the last two years, we have taken it to 22. We are further increasing the number of showrooms this year and are paced well in terms of infrastructure. What we need to do now is churn the infrastructure and will grow strong in Audi-approved plus this year. As the volumes keep growing, the percentage growth will not be on the same scale. The space also got created because luxury cars, in general, have become expensive in the last 3-4 years. We have created a huge space in luxury and non-luxury, which we try to cover by the segment.
How is the semiconductor and supply chain scenario right now?
We are still not completely out of the woods but the situation is improving. The problems in the supply chain are still persistent. Not just the supply chain but also the cost factor. The foreign exchange rate and commodity prices for the time being are stable but in the past they were high, all this complexity is still hurting us but things are getting better.
Will there be another round of price increases for vehicles?
We have just done price increases, so for some time, we will be at the same prices. There have been a couple of price increases that the whole industry had to take as we try to absorb as much as we can. In some products in the budget, we also had an increase in the duty, which has gone up from 66 per cent to 70 so a four per cent increase also has an impact. We are working on it for now and we will evaluate how much we need to pass on.
What are the electric vehicles that Audi will introduce in India? When do you plan to commence assembling electric vehicles in the country?
We will be launching the Q8Etron in the third quarter with variants. Making electric vehicles in India is on the drawing board so we are finalising not with the headquarters. Maybe next year or the year after that, it will happen and as we are going completely to an electric car company by 2033 so next 10 years we will be moving towards it fast.
With electric vehicle raw materials pricing being volatile and lithium prices being high, do you see India’s discovery of lithium deposits as an aid in the electric mobility transition?
Prices of batteries in general have become expensive in the last couple of years and we hope it comes down at some point in time. What we have discovered in India is very initial news and we need more information. If the lithium deposits are true, then it is fantastic news as it will help the Government initiative and dependency on imports will reduce drastically and we will become a major export hub for battery cells.