The demand for SUVs has been growing. For Audi India, too the first half of 2023 saw almost 60 percent of sales coming from the SUV segment. But does that indicate the start of the end of the road for sedans? Audi does not think so.
“The luxury segment so far was always 50:50 (SUVs and Sedans), a bit of percentage is of course sports car and coupe. In H1 CY2023 Audi had 60 percent sales from SUVs, but that will not stop us from selling sedans Because that is also a chauffeur-driven market. When it comes to perception, ground clearance, and the way the cars are made, the rear seat comfort in sedans is considered to be better than in SUVs. For people who drive and sit in the back, it’s an SUV combination that works best. For us, whatever is available globally and makes business sense will be there. But the focus for sedans will not be dropped,” points out Balbir Singh Dhillon, Head, Audi India.
However, Audi India, which was amongst the first luxury car brand to shift its strategy from diesel + petrol to petrol + electric concedes that it is losing out on some “diesel vehicle customers.”
“There are still customers who only want diesel and we are losing out on those, but the demand (for diesel cars) cannot be completely zero. It will only be when everyone stops selling diesel cars. We are definitely losing customers (in diesel vehicles), but we are mindful of that,” he adds.
Targetting 100% EV sales
Audi India has launched the Q8 e-tron and Q8 e-tron Sportback in India with a Rs 1.13 crore price tag. This is due to the fact that imported vehicles still attract a 110 percent excise duty.
Dhillon believes that there is still time before the EV threshold crosses the significant mark that will push OEMs to start making them in India.
“Our business strategy is that 90% of the cars we sell here are made in India, and the remaining 10 percent are normally imported. We are working with Audi headquarters for electric vehicles, while nothing yet has been finalised, I am confident the decision will be taken at the right time. To become a fully-electric car company is only a matter of when and not if,” says Dhillon.
He argues that at present the whole luxury car market put together will see sales of around 47,000 cars in 2023. On average, each OEM has around 10-15 models available in India. All put together, there are more than 100 models in the luxury car market alone. If one divides the total sales by the number of models available, each model sees roughly around 450-500 unit sales.
“If we launch a model today, we have to ensure spare parts and train manpower to support it for at least 15 years. That means we need a certain minimum threshold to sell those cars in India. My estimate is that this year the luxury segment will see 5 percent electric vehicle sales and our own estimate is that by 2025-26 Audi will have 15% and by 2030 about 50%. Thereafter the change will be drastic, that means within 3 years it could reach 100%,” he concludes.
