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With an uptick in demand and sales of electric vehicles among luxury car markers in India, German luxury car maker Audi’s India head, Balbir Singh Dhillon spoke to buisnessline on the company’s strategy, localised car assembling, changes in the purchasing pattern of luxury vehicles in India, and the growth of its preowned car business.
What is Audi India’s game plan for electric vehicles and the development of infrastructure in the country?
Over the next 10 years, one will mostly see manufacturers selling electric vehicles. We are open to ideas on investing and improving customers’ life by installing chargers on highways. We have installed 100 EV chargers, including high-speed chargers in 65 cities and 70 chargers in dealerships and workshops. We first install chargers at customers’ houses or offices before the delivery of the product.
Highways with charging points and high-speed chargers need to come up, which is also being pushed by the Government.
How is the response in India to the Audi EVs?
We have launched five electric cars last year in July and most of the cars are presold before they arrive in India. There is a positive momentum in terms of consumers and most of the consumers we speak to use the car within the city. The confidence in using electric cars in intercity has to go up and that will come as charging points are installed along with high-speed chargers.
When will Audi manufacture its electric cars in India?
It is about when to start the manufacturing and not if. There will be a transition that will happen in the next 10 years but at what point in time and quickly is a question that we are asking ourselves.
Globally, Audi has decided to become a fully electric car company by 2033. We need to be reasonable in making our business cases as we require a certain minimum threshold volume. This will also require further investments as we cannot use the existing manufacturing line and will need to set up new lines or switch up one line.
What are your plans to increase the assembling of Audi cars in India?
The demand today is much stronger in the higher segment than the entry-level luxury segment, which is pushing us to get more cars from the headquarters. However, in that segment, with the current duty and tax, it will always be locally made by us. The percentage will remain between 80 to 90 on the local assembling of cars based on the demand and availability of the product. As we move ahead towards electric mobility, there will be a transition phase for one to three years wherein the import percentage will go up but we will be making electric cars in India.
Digital penetration among consumers’ buying patterns has been witnessed. What are the key consumer patterns that the luxury cars segment is seeing?
In the luxury car segment, we sell more emotions than products; there is a lot of physical engagement with customers but a lot has shifted digital. In the general purchase process itself, research that the customer does digitally has increased. We are seeing a big uptick in consumer booking services, online which was not the case earlier.
Another key pattern is that, with travel restrictions due to coronavirus and visa restrictions, there has been an increase in the number of people buying luxury cars and driving within India. Consumers have moved their spending behaviour from travelling internationally to domestic travelling and driving in the country. The strengthening of infrastructure and intercity travel has helped us in improving our sales.
How is the preowned Audi car business going, and what are the plans for expansion?
In 2020, we had only 7 showrooms of Audi-Approved Plus and by the end of 2021, we had 14. We are hopeful that there will be 22 showrooms by the end of this year. In the first nine months, the business has grown 73 per cent. Most of the business is under the unorganized sector but is slowly getting organized. The organized sector of the preowned car business is growing very strongly.
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