Along with the April 1 deadline of switching over to BS VI for the Indian automotive industry, luxury car maker Audi faces another challenge. The challenge is to retain and/or attract customers who love diesel cars as Audi India has decided to enter the BS VI era only with petrol cars. Diesel models have been stopped, at least temporarily.
Balbir Singh Dhillon, head of Audi India, with cricketer Virat Kohli at the launch of the Q8.
For an OEM which gets 65-70 of sales from diesel cars, it can be a big challenge. Balbir Singh Dhillon, head of Audi India, sees this challenge and plans to tackle it in the coming months. "While yes, we lose some diesel customers, but at the same time we also gain other customers who come to us for the very first time. At the same time, we also have a strategy how to retain the customers who are wanting only diesel cars," says Dhillon, after launching Audi India's new flagship petrol-only SUV, Q8.
Audi India plans to approach diesel car lovers with certain programmes, "to break the perception" some which may not allow them to opt for a petrol vehicle. A perception change happened with Dhillon himself as he had earlier thought that an SUV can only be diesel-run.
Audi India's sales volume is almost equally divided between sedans and SUVs. In the sedan segment, its most recent launch was the A6. The eighth-generation model has been launched in petrol version only, which Dhillon says is attracting good interest from customers.
Electrification is the "way to go"
The Q8 SUV with mild hybrid technology maybe a sign of things to come. Dhillon says as emission norms get increasingly stringent, more so in the West, "there's no choice but to move towards electrification". "Especially in the luxury car industry, all companies are investing on electrification," says Dhillon. Audi, one of the German 'Big 3' in the luxury industry, will enter the Indian electric mobility market.
The e-tron SUV, Audi's first full electric vehicle (EV), showcased last year, will debut in India this year, confirmed Dhillon. It is to be noted that Mercedes-Benz will also launch its first EV in India, the EQC, in April this year. While the conventional internal combustion engine vehicle business may already be too competitive, Audi India says it's more the merrier in the EV market, at least for now. "We are more than happy that more and more competition is coming into electric cars because there's no standalone success any more. If they will bring electric cars, they will also create infra. If all manufacturers come together to create battery infrastructure, it will be an even bigger success," says Dhillon.
The year gone by has been a very challenging one for the Indian automotive industry, hit by a severe slowdown. Audi India saw its sales volume fall by nearly 29 percent (YoY) to around 4,600 units in 2019.
Dhillon feels this year too could be challenging for the market, though not as bad as last year. "2020 will be a challenging year for sure for the whole of the industry. On the luxury side, I still see it to be a flat year in general," says Dhillon, while adding that India is a "very long- term market for anybody and everybody to stay here". He bets on India to be a "huge" market where the luxury car segment will also see good growth. In that journey, 2020 is an "extremely important" year for Audi India as it launches the "brand shaper" Q8, followed by a portfolio of other petrol, electrified models. The C and D segments will be the key focus areas of the German luxury carmaker.