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Audi bets big on pre-owned cars catching buyers’ eye

Murali Gopalan Mumbai | Updated on June 17, 2020 Published on June 17, 2020

Balbir Singh Dhillon, Head of Audi India   -  PAUL NORONHA

India chief’s top priority is to ensure dealer sustainability

As Head of Audi India, Balbir Singh Dhillon is upbeat on the pre-owned car business especially in the present Covid-19 scenario.

“We are very confident about this business. It already grew 11 per cent last year while luxury cars dropped 15 per cent,” he told BusinessLine. Given that the pandemic has pretty much crippled the economy, luxury cars will “definitely de-grow” in this quarter.

“However, we still believe that the pre-owned car business will bring more customers to experience Audi before they can buy a new car. This is something that we are focussing on as we move on in the next few years,” said Dhillon.

This also goes hand-in-hand with the objective of keeping dealers profitable during these difficult times. For instance, when Audi recently commissioned a showroom in Gurugram near Delhi, it decided to install fewer new cars for display as against for pre-owned cars.

Rightsizing of facilities

“We built seven new car displays and 14 for pre-owned cars. In the times to come, both businesses have to coexist,” said Dhillon. According to him, this strategy boils down to “rightsizing of facilities” and not downsizing. This explains why Audi is also focussing on the ‘workshop first’ mantra when it comes to growing its presence across India.

“What we have been working on is going to multiple cities with just the workshop first approach. If a workshop is close, it gives customers the confidence that the car will be taken care of well,” said Dhillon.

Consequently, Audi plans to move into more cities with workshops given that it has enough showrooms at least for now. The idea is to ensure dealer sustainability. “It is very important for my partners to be profitable since they have invested so much in the brand,” he said.

In a nutshell, the Audi retail strategy is to go with a workshop first model, followed by the pre-owned cars business and finally a new car showroom. “This is the step-up approach that we are taking for the future as well,” he added.

Digital drive

It is also being done keeping in mind investments and the way “digitalisation is going to disrupt” the industry. “We have already taken initiatives to this extent in the past to the point that this it is helping us today in this difficult phase,” said Dhillon. Going forward, the luxury car brand is betting big on digitalisation in the post-Covid world where online buying will take precedence for customers.

While there are no two ways about the fact that the automobile industry has been hit badly by Covid-19, the Audi India chief prefers to see the brighter side. The optimism is based on, what he terms, YOLO (you only live once). As he explains, people have been bogged down so long since the lockdown began that most of them would be raring to go when it is all over.

“I think this is something which will advance decisions across homes in buying a car,” said Dhillon. With international air travel still to become a reality, this void could be filled by domestic holidays for the family. “You may want to drive to Goa and back in a car. People would rather avoid flights and trains for sometime and inter-State travel could happen more in a car,” he said.

On WFH

While work from home has been a new experience for the Audi India team, it has had its cost-benefits in terms of digital/video conferences which could increasingly become the new norm going forward. Yet, Dhillon is categorical that “the human touch has no substitute”.

From his viewpoint, it is critical to meet dealer partners and customers even while this may not happen as frequently as the pre-Covid days.

“While doing reviews with dealers, I think it is very important that we see each other physically. We are not commodities but human beings and emotion is a big part of our business. I personally believe that we sell emotions; the car is a byproduct,” said Dhillon.

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Published on June 17, 2020
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