The Hindu Business Line : Audi to launch cars by mid-2004

AFTER making an abortive attempt to enter the Indian market a few years back, Audi, the German performance and sports car manufacturer, is finally putting together its plans for an entry into the country.

The company is expected to decide on the specific models and their positioning in the Indian market by March this year. Meanwhile, Audi is hoping that customer feedback at the Auto Expo here will also provide the necessary information base for taking India-specific decisions.

Speaking to the Business Line, Mr Jorg Hofmann, Managing Director, Asia Pacific Region of Audi AG said that the company is planning to mark its foray in India with launches by mid-2004.

"If the final decision is taken by March this year, specific models such as the Audi A6 or the A8 may be launched in the country," Mr Hofmann said. He added that the company is only looking at realistic volumes of about 200 cars per annum initially.

The market for luxury, performance cars in India is only about 5,000 units per annum. But, Audi, like some of the other luxury marquees in the market, is projecting a growth in numbers in this segment during the next few years.

Talking about the company's launch plans, Mr Hofmann said that since Audi has entered the Indian market late after luxury brands such as Mercedes Benz and Bentley have made their presence felt here, this second attempt by the company will be done cautiously in two phases.

Audi is one of the largest manufacturers of sporty luxury cars in the world. The company is hoping that the Indian market for luxury cars will be the same size as that of China in a few years time. "India is the second most important market for Audi in Asia. It is the China of the future," Mr Hofmann said.

He added that the Audi brand is a sporty, dynamic, youthful brand, unlike the Mercedes Benz brand, which is a conservative luxury brand. "So we will be looking at an even smaller, niche segment of the luxury car market," Mr Hofmann said.

He also said that the biggest deterrents for the company a few years back, when it aborted its planned entry due to cost reasons, continue to exist even now. He felt that the major issues that continue to determine the viability of the India operations will be the high import taxes and the difficulties in homologation that new entrants face.

Mr Hofmann said that the company would continue to be cautious with its plans for India due to the high taxes and price sensitive Indian consumer.

May consider using Skoda's assembly

AUDI'S initial plans for the Indian market only envisages importing completely built cars from the company's German plant. However, if the company decides to assemble the cars after importing completely or semi-knocked kits from its German plant, it may decide to use the assembling and manufacturing facilities of Skoda Auto India, which is also a Volkswagen group company.

Mr Hofmann said that the possibility of using Skoda's facility exists. He however added that it may be too early to confirm . He said that if the Aurangabad plant of Skoda has extra capacity and if the German companies come to an understanding about sharing the facilities, local assembly may be possible.

The Audi official however, ruled out the possibility of the company using or sharing the dealerships and servicing facilities with Skoda. "We will definitely enter the market exclusively and not look at entering into an alliance with any other manufacturer's dealership network," Mr Hofmann said. The Audi brand is exclusive and cannot be represented in its full spirit by other manufacturer dealerships, he added.

Audi will as a result make its foray through boutique showrooms and dealerships that will also simultaneously build the Audi brand and educate potential customers. Currently, brand awareness for Audi is low in India. Initially, the company is expected to set up dealerships only in the four metros.