New models, digitisation: How Audi plans to recoup lost ground in India

It will bring new models more frequently, expand service network and focus on digitalisation

Luxury carmaker Audi AG has chalked out its Strategy 2025 in a bid to recoup the ground it has lost in the Indian market.The move comes amid flagging sales in a slowing market.

Passenger vehicles sales in India have been declining for six quarters and luxury carmakers haven't been spared either. In calendar year 2019, the local arm of the German luxury carmaker saw its sales touch a nine-year low. Its sales fell 29 per cent year-on-year to 4,594 units. “We suffered more than the overall market not only because of certain external factors but also due to reasons particular to the company that impacted performance in some of the key cities in eastern and northern India. It matters when the overall volumes one is doing are not very high and you have a limited presence,” says Balbir Singh Dhillon, head, Audi India.  

To get back in the reckoning in a market where it gave tough competition to its German rivals, Mercedes Benz and BMW India, and recoup its share, Audi has crafted a four-pronged plan. “We have devised a Strategy 2025 — which starts this year and continues till 2026. We have laid down clear goals. This will be primarily led by the four pillars of customer centricity, network, digitalisation and new products,” says Dhillon who took the top job at the luxury car arm of the Volkswagen Group in July 2019. He was in-charge of the brand’s dealer development till he got into the driver’s seat.

To be sure, Audi, the last among the three luxury brands to enter India, had a very good run for its first four years in the market (it entered India in 2010). Dented by the "dieselgate" scandal in its home market and plagued by internal factors that included some of its key dealerships underperforming, it started losing momentum from 2016. Sales continued to hurtle down thereafter, touching a low of 4,595 units in 2019, data from I.H.S Markit shows.

Puneet Gupta, associate vice-president at I.H.S, believes, “Audi can still catch up with the rivals and make a strong comeback”, provided it fires on all cylinders and strengthens its weak links that include after-sales and the lack of new products in its portfolio.

Among other things, having a deeper connect with the customer through quality sales and after-sales tops Dhillon’s priority list. As part of this, the company has a “workshop first” approach which will involve going to smaller locations and increasing the network to 42 by the end of the ongoing calendar year. It presently has a presence in over 35 locations. Besides the brick and mortar workshops, it will also have mobile service vans. “The idea is to have sustainable and profitable dealerships,” says Dhillon.

Next up will be digitalisation — in the showrooms and off it through augmented and virtual reality, e-commerce, and specific mobile applications, to name a few. All these will help the company service the young upwardly mobile customers in a hassle-free way, he says. Audi has a lot of catching up to do with Mercedes that has been very aggressive in its digital push.

In October 2019, the luxury car market leader announced it will set up a directly-run online platform that will cater to the entire gamut of used cars, new cars and collectibles for customers. It said it would start to sell used cars (October 2019) and new cars (from January 2020) on a new website, through a partnership with American online seller Roadster Inc.

The launch of new models at a frequent pace will be the centerpiece of the Strategy 2025. It comes after a hiatus of some years. In a segment where new model launches is key to survival, Audi launched only two models last year — the A4 and the A6. Dhillon says this is set to change soon and launches will be more frequent. On Wednesday, it made a beginning with the launch of the Q8. Priced at Rs1.33 crore, the model targeted at the ultra rich is a “brand shaper”, says Dhillon and the “top down” approach to the model launches will help Audi attract a new set of customers into its fold. With such models commanding a premium in terms of after sales, it will also help its dealer become more profitable. Moreover, a presence in the super premium segment also ensures the company is not part of the “discounting game”. It allows buyers to design cars virtually and customise them as per their personality. “No two Q8s will be the same,” he says.  

The Q8 will be followed by the A8 launch next month. “This is going to be an exciting year for Audi in India,” Dhillon says, adding that the company will have a new model very quarter. All the BSVI models the company launches this year will either be completely new – not models Audi runs in other markets. They would either be next generation models or an earlier model with some improvements. New models will comprise electric and petrol models, he adds.