Audi is known as chaar bangadi (four bangles) in Gujarat, a probable reference to the luxury car brand’s logo and testimony to its growing popularity in India.
The brand has been a household name in India since 1985, the year cricketer Ravi Shastri bought home an Audi 100 after India won the Benson and Hedges cup, even though the German car maker set up shop in India only by 2007.
For many Indians, Shastri driving the car all over the Melbourne Cricket Ground with team mates was a moment to cherish. For Audi, it was an unofficial foray into the country.
Michael Perschke, Audi India-Head, who came on board in July 2010, says the company has more or less exhausted its €30-million spend that was set aside for India. The luxury car-maker, which considers India as one of its top markets, expects to sell more vehicles in the country by the end of the decade than in Japan. In a tête-à-tête with Business Line, Perschke rubbishes allegations of it providing free cars to Bollywood personalities. Excerpts
How has the India run been so far?
The initial start was rather slow. There were not much of expectations, but some people said India was going to be next China at the speed it was accelerating.
We still see that India is in the early stages of development of any trend of luxury, whether it is car, fashion or homes. The luxury car segment has only developed in the last 4-5 years.
For us, the journey is still in the early part, probably like Christopher Columbus travelling to America and reaching halfway through Greenland. There are a lot of opportunities here.
You are not the number one in India…
The only disappointment is that till date I am not the number one. We always said that we wanted to become the number one by 2015. It could be even earlier. The difference between us and the leader was between 100 and 300 cars in FY13.
An allegation by competition is that Audi has been offering cars free to Bollywood stars in an attempt to spruce up numbers?
How many cars can I give to Bollywood to up my numbers? If I were to offer my cars for free, I would probably have sold another 40-50 cars more. It’s fortunate that the Audi brand has a strong pull in Bollywood.
How many more models are assembled from India?
As of today, we assemble the A4, A6 (sedans), Q5 and Q7 (SUVs) in India. By the second half of this year, we will start assembling Q3, which then gives us the opportunity to look at a couple of more products.
Already more than 90 per cent of our products are being assembled in India. Now with Q7 and expected assembling of Q3, we are very much in line of being a local player.
You have already invested about €30 million in India during the last five years. How much more do you intend to invest?
Audi committed to invest €30 million in India when it set up operations in 2007. To a large extent, we have exhausted the amount. Right now, we are looking at a 5-10 year investment plan, but nothing has been finalised yet.
So, when will India be among your top markets?
I assume that in the next 8-10 years we would sell more cars in India than we sell today in markets such as France, Spain or Italy. That means India will probably be bigger than some of the larger European markets. It may be second to Germany or the UK, but could be ahead of France, Italy or Spain.
How is China faring?
China is in a different league. In China, we sell more of Audi than any other single country. China, for us, is bigger than our home market Germany. It is also larger than the US. In totality, sales in China are as much as that being sold across western Europe.
Audi targets to sell 10,800 cars this year. Isn’t this a bit ambitious considering the present economic conditions?
Correct. At Audi we are ambitious. We feel that we have a momentum for Audi with one of the youngest product ranges and a professional dealer network.
What about increasing dealerships?
We are at 25 locations as of 2012-end. We might increase this to 32-34, and we are looking at tier-III cities.
Did this Budget surprise you? Audi did hike prices of certain models.
Every Budget surprises you. There is no strategic continuity in the Budget. I think we need to have stable conditions because automotives is a long-term industry. When you invest in a factory, your return on investments will mature over 15-20 years. Policy changes every year is not good for the industry. The car industry needs a stable tax regime.