For luxury carmakers in India, building in India is an age-old paradox. Since it’s difficult for them to get critical mass in the country owing to higher tax rates, most carmakers choose the completely knocked-down (CKD) route as opposed to completely built-up (CBU) units that attract more than 100 per cent duty. German carmaker Audi India told Business Today that more localisation can only happen if the industry can achieve critical mass.
“As of now, we have enough capacity to cater to the current demand. To make any more investments, we need to achieve a certain threshold sales volume in India, allowing us to make strong projections for the future, which is a prerequisite for any fresh investments. Currently, Audi A4, Audi A6, Audi Q5 and Audi Q7 are locally assembled in India. To assemble more models locally, we need to reach the full potential of the luxury car market,” Balbir Singh Dhillon, Head of Audi India said.
All of Audi’s international models are available for India. For now, the aim is to launch these models in India faster. “Our EV supercars, the Audi RS e-tron GT and e-tron GT were launched in India within a few months of their global launch. Likewise, our RS (performance) models were launched in India within months of their global launch,” he said.
Audi India registers robust growth of 29 per cent year-to-date 2022. The company delivered 2,947 new cars in the first nine months as compared to 2,291 units in the same period last year. It said that it achieved 29 per cent growth despite severe supply and availability challenges. “The semiconductor supply situation is gradually improving but remains volatile in the last quarter of 2022. We do expect to see a significant improvement in the course of 2023. The waiting period on our models has improved since the first half of this year and we are hopeful this will continue to improve in the months ahead,” Dhillon said.
He adds that digitisation is going to be a major differentiator going forward. “Digitalisation has been one of the megatrends shaping the global automotive industry, and it is no different in India. The pace of digitalisation has only accelerated during and post-COVID. India is well on its way to becoming a digitally connected ecosystem - the country has more than 700 million internet users and this will only grow in the coming days, months and years,” he adds.
Audi India, he adds, will focus on digitalisation as a key pillar of its strategy in India. “We want to be known for using future technology today! Even before the pandemic hit us, we had taken the technology to customers’ homes via virtual and augmented reality. With our online sales and after-sales initiatives, we are taking digital experiences to the living rooms of our customers and giving them the flexibility to purchase their preferred Audi of choice,” he said.