Audi bets on performance models to power next growth phase in India

Luxury car brand Audi has applied the 'top-down' strategy for the Indian market when it launched the A8 as its first model here.

As the brand nears the 10-year milestone in India, it is doing something similar for the next phase of growth. It is betting on its performance model portfolio which is topped by the just-launched R8 V10 Plus to woo a bigger number of Indian customers, many of whom are affluent youth. "Here’s where a lot of our technology starts, the technology that goes into our Le Mans and GT cars and then comes into our production cars. So it’s important to have that taste in India. Our performance section is gaining traction with the RS7 and RS6, and with the new R8, we’re seeing that segment grow," Joe King, Head, Audi India (pictured below), told Autocar Professional. Having Virat Kohli, captain of the Indian test cricket team and the new youth icon, as the brand ambassador further helps that strategy.

If the reception to the new R8 is any indication, it won't be surprising if Audi zips to the bank with a much wider grin this year. According to the company, the R8 found 25 customers – as of May 12 – when it formally announced this fastest Audi's minimum price tag of Rs 2.55 crore. The previous R8 found 100 takers in India. "Based on the feedback, I don’t see why we can’t smash it out of the park," King, an Australian, says it in cricket lingo. 

The contribution of performance models in Audi India's overall sales volume is "tiny" currently, but "it would grow", King hopes. Five out of Audi India's portfolio of 12 models fall in the sports/performance category.

In terms of volume, Audi India ceded its number one position to rival Mercedes-Benz India in 2015, after two years of being at the top. King attributes this change of position also to the product lifecycle that some of his models are in. "If you look at our product lifecycle, we shouldn’t be No 1. I think this is a time to focus on our fundamentals. We’ve been in the country for 9 years. We are the only luxury brand that is growing year-on-year and we are moving to a sweet point where we are going to have an entirely new product range. So it’s important that our foundations are strong so that we can maximise that," says King.

The Indian luxury car market, which sold around 35,000 units in 2015, has stagnated a bit but that's not dampening Audi's outlook for India. "The luxury market is just 1 percent of the overall passenger vehicle segment. In other parts of the world, it’s 10-15 percent or even more. So there’s a lot of organic growth to come," says King.

Audi will also launch the new A4 later this year to tap that growth. In the coming years, the German's brands portfolio will see a major change. As that happens, the top-down approach with a special focus on performance cars will continue. King explains the rationale behind it by saying, "I think that we need to continue with that top-down strategy, and even with these performance cars, we continue to invest in that area, because it adds a lot to the brand, and it adds a lot to the people aspiring to grow within the brand."

Also read: Audi set to add some luxury in Indian EV market