 "No hybrid, our focus remains on petrol and electric: Audi India Head")
Audi will not launch plug-in hybrid electric cars in the country, India Head Balbir Singh Dhillon said on Thursday, in sharp contrast to the German automaker’s plans to expand its hybrid line-up globally amid the EV slowdown.
Petrol and electric cars will be integral to the company’s India plans, Dhillon asserted.
He said luxury car sales in India are expected to increase by 8-10 per cent year-on-year (Y-o-Y) in 2024, owing to the high base effect and the ongoing supply chain issues. In 2023, the growth was significantly higher at 28 per cent Y-o-Y, with luxury carmakers selling 48,500 units.
Currently, about six per cent of luxury cars sold in India are electric.
As customers are beginning to transition from internal combustion engine (ICE) vehicles to electric cars, the lower GST on the latter is aiding their adoption, Dhillon said.
"Till the time we reach 50 per cent penetration in the luxury car space, we would need government support (through lower GST)," he told reporters at the launch of Q8.
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While petrol and hybrid cars come under the 28 per cent GST slab, electric cars come under the five per cent GST slab.
Last month, a senior official of Audi's rival BMW Group had spoken in favour of incentives for electric cars in India.
Jean-Philippe Parain, senior vice-president at the BMW Group for various regions, including Asia-Pacific, had told reporters that strong hybrid or plug-in hybrid cars can be a stepping stone towards India's aim to reduce carbon emissions, but the country's focus should remain on electric vehicles (EVs) with regard to low taxes and incentives.
Dhillon on Thursday explained the company's strategy on this issue.
"We gave up selling diesel cars in India in 2020. We are completely focused on electric cars and petrol cars. Since the volumes in the luxury car space are limited, it is important that our focus is very clear because any car that we introduce, we have to service it for 10-15 years. For that, we need infrastructure that can provide components at the right time, and provide manpower across dealerships that are fully trained. Everything comes at a cost, and we need to maintain it. So, for us, the path is clear, it is first petrol and then electric," he explained.
"In our global portfolio, we do have plug-in hybrid cars. But at this point of time, the decision is very clear that we have to focus on petrol and electric cars," he said.
When asked if Audi is planning to bring any plug-in hybrids to India, he replied in negative.
Audi India sold 7,027 units in 2023-24, recording a 33 per cent Y-o-Y growth.
In 2022-23, Audi India had sold 5,275 units. However, the company is going through some tough times due to supply chain challenges. In the first quarter of 2024-25, the German carmaker sold 1,431 units, which is six per cent less Y-o-Y.
The share of electric cars in Audi's car sales in India is currently about 3 per cent.
"It is definitely not enough...we intend to go close to 40-50 per cent by 2030. This might come whenever we decide to make these cars in India, as it will lower their prices," he added.
Audi's electric cars are currently priced Rs 1.2 crore and above and there is a huge segment, which comes under the bracket of Rs 50 lakh and Rs 1.2 crore, where the company would like to establish its electric presence, he noted.
He said the government also incentivises electric cars because it helps the country reduce its fuel import bill.
As India aims to become carbon neutral by 2070, automakers are divided on the best path forward.
Japanese mass market players like Maruti Suzuki, Toyota, and Honda are pushing for tax cuts on hybrids, arguing that EVs alone can't bear the burden of reducing emissions.
However, carmakers like Tata Motors, Hyundai, Kia, and Mahindra & Mahindra insist that only a full commitment to EVs can truly decarbonise India's roads.