The second wave of the pandemic brought the auto sector to a screeching halt, yet again. After a tumultuous 2020, which saw luxury car sales in India decline almost 40%, Balbir Singh Dhillon says he is better prepared this year. He talks to Sapna Nair about non-metros paving the way for growth in the luxury segment, Audi’s upcoming electric vehicle foray, and more.
How has Audi waded through the past year amidst lockdowns and a mostly absent, though vital, physical interface?
Despite the onset of the pandemic, 2020 was the year we launched five new products and one special edition — Audi Q2, Audi Q8, Audi A8 L, Audi RS Q8, Audi RS 7 Sportback and the Audi Q8 Celebration. What we learnt in the months after the lockdown was lifted last year is that people wanted to treat themselves to luxury so there was no downward trend. We experienced a significant spurt in sales in the last five months of 2020, which are typical festive months — December being our best month. In 2020, we sold 1,639 units. Our Audi Approved: plus (pre-owned business), too, registered good growth during this period.
We are better prepared this year. The learnings from last year in terms of customer interaction have been rolled out. From addressing customer enquiries to deliveries and even after-sales, our dealerships have taken the lead to incorporate all these aspects digitally into their processes. While digitalisation remains an important element, given the circumstances, it is a long-drawn journey, as car buying in the luxury segment works slightly differently. Dealerships remain the primary source of car buying, as touch, feel and drives remain key buying facets in our segment.
How much do the non-metros contribute to your sales? Which markets does Audi deem most lucrative going forward?
With an increase in disposable incomes and an aspiration to own a global brand, the contribution to volumes is increasing steadily from smaller cities. There is a positive trend of customers in smaller cities having an appetite for performance and lifestyle cars with new body styles. Our share of sales from non-metro cities is around 50%. As a brand, we continue to expand our footprint in regions that exhibit rising aspirations to own luxury cars.
Our strategy of entering smaller markets with service centres under the Workshop First initiative, along with a focus on Audi Approved: plus, has led to increased visibility for the brand. We have penetrated markets such as Vijayawada, Bhopal and Thiruvananthapuram, and see these locations as pivotal to our growth in the future. In addition, our digital initiatives have taken us closer to customers in smaller towns with engagements coming in from markets like Karnal, Coimbatore, Lucknow and Vadodara.
Audi’s electric foray, with e-tron, is imminent. What kind of uptake do you expect for luxury EVs in India?
We are all set to launch not one but two electric cars: the Audi e-tron and the Audi e-tron Sportback. The e-tron is one of the top-selling electric SUVs in Europe. For us, it is not just a car, but a brand in itself. The buyers of Audi e-tron and the Audi e-tron Sportback are envisioned to be first-movers and early adopters who know the merits of going electric. They will be evolved car enthusiasts who already own an impressive fleet of high-end cars. One of the reasons customers opt for EVs is the ‘fun to drive’ element. EVs with stronger batteries today, provide peak torque right from the start without any delay.
In 2020, the luxury car segment saw 40% decline in sales. Its share in the overall passenger car category has been around 1% since the past decade. Is a rebound in sight?
The luxury segment accounts for 35,000 to 38,000 units sold per year, which is still a relatively small number for a country like India. Apart from factors like high taxation and external conditions, the unfortunate pandemic has added to this remorse. Amidst the current crises, car buying has understandably taken a back seat.
Currently, while the demand for vehicles remains strong, we foresee some industry challenges related to supply chain, dealership activity and customer movement in the coming months, given the localised restrictions in several markets. What is important for us is that we are confident about the potential that this country has for luxury cars in the medium to long term.
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