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Audi to take non-metro route to drive sales

The new strategy revolves around bringing in new models, widening geographical reach, ensuring profitability in the sales network and switching to sales of only petrol and electric vehicles, something which the group is doing globally.

Updated: Oct 25, 2019, 01.49 PM IST
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The new strategy is crucial for the company as it is staring at a sales decline for the fifth consecutive year in 2019.
MUMBAI: German luxury carmaker Audi is looking to deepen its network outside the main metro cities in India and launch cleaner petrol and electric vehicles to get back on the growth track after posting four straight years of sales decline.

The company has internally formed a plan -- Strategy 2025 -- as part of which it will launch a new product every quarter next year, Audi India’s new head, Balbir Singh Dhillon, said in his first interaction with the media after assuming office.

The new strategy revolves around bringing in new models, widening geographical reach, ensuring profitability in the sales network and switching to sales of only petrol and electric vehicles, something which the group is doing globally. Sales numbers will not be the focus during this period, Dhillon said.

“Next year, petrol, plug-in hybrid and electric vehicles will be our focus. We are also bringing in the eTron electric SUV,” Dhillon told ET.

The company will also enter tier-2 and tier-3 markets as part of the strategy but with a workshop-first approach, he said.

“We will look at tier-2 and tier-3 markets with a sizeable Audi car population and set up a workshop there. After some time, we will put up a pre-owned car showroom there and when the volumes are justified, we’ll open a showroom,” he said.

The new strategy is crucial for the company as it is staring at a sales decline for the fifth consecutive year in 2019. Just six years ago in 2013, Audi was the market leader and the first to sell more than 10,000 luxury cars in India in a year. Its sales in 2019 are expected to be half of that at around 4,000-5,000 units, as the overall market declines, said people in the know. A lot of customers have also moved on to its German rivals Mercedes and BMW.

“No brand has always been number one -- this is all cyclic. Internationally also if you see, it is driven by product lifecycle,” Dhillon explained.

Audi's sales are expected to be further impacted in 2020 as the carmaker will stop selling diesel cars in India from April next year when BS-VI emission norms kick in. Currently, diesel vehicles account for 65% of Audi’s sales, but the company expects customers to move away from diesel vehicles in the long run, aided especially by the government’s push in the face of a rising environmental crisis. For instance, diesel vehicles older than 10 years are not allowed to ply on the capital’s road.

Audi will also enter the pre-owned vehicles market with ‘Audi Approved +’ outlets to ensure channel profitability while its strategy bears fruit, Dhillon said. This will ensure that the company gets more customers into its fold and its dealers remain profitable. There are almost 75,000 Audi cars in India, he said.

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Four years into a slide, Audi hopes to fight back with new cars

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