Audi gears up for mobility dynamics

Terence Bryce Johnsson is intrigued by the fact that the luxury car segment accounts for barely one per cent of India’s automobile sales.

“It is clearly not about money or purchasing power and one of the things we need to think about is if the customer wants to own or use premium mobility,” says the Head of Sales Overseas, Audi AG.

Johnsson is only too aware of the rapidly changing mobility dynamics panning out across the world. Today’s youngsters are increasingly steering clear of the burden of car ownership and resorting to less expensive fleet taxi alternatives.

India is no exception to this behavioural pattern either with the likes of Uber and Ola giving customers more affordable mobility options. In the process, they are also spared the added burden of driver salaries, parking charges and garage security in the process.

From Johnsson’s point of view, access to premium mobility is something that Audi needs to look at where customers may not want to be bogged down by the hassles of ownership. “There are some interesting things happening which could present some great opportunities,” he says. Across the world, auto industry leaders are beginning to realise that today’s world is completely different from the time when the traditional business model of manufacturing and selling worked without any glitches. With rapid urbanisation and emission challenges, carmakers are beginning to realise that they need to think out-of-the-box to stay ahead.

It is precisely for these reasons that Audi is also gearing up for the future with three strategic pillars that will drive its Vision 2025. The first is digitalisation which is about connected mobility through driver assistance systems and piloted driving. Sustainability is next where electric cars and fuel cell technology will lead the change. Urbanisation is the third lever where Audi will look at individual mobility options in the city of the future which could include taking a car on lease or rent.

“The customer values his time and peace of mind and would like to be spared the angst of driving and maintaining his car. His idea is to be productive and this is where mobility can play a positive role,” says Johnsson. All this puts in context the investment of 24 billion euros that Audi has earmarked till 2020 largely on new models and technologies.

Other significant changes are also due to happen in the global automobile industry. “We are going to see completely off-the-radar competitors like Google and Apple with new business models. They are doing something quite different in mobility and usage of the vehicle,” says Johnsson. In addition, there are real time challenges of economic challenges in countries across Latin America reeling under the onslaught of the oil price crash coupled with political upheavals. Brazil has been the worst hit while Russia is also in bad shape. These are potentially important car markets which were doing well less than 12 months ago.

In contrast, India is doing a lot better and is on course to becoming the world’s third largest automobile market by the end of this decade after China and the US. Johnsson is keen to keep the momentum going for Audi and increase its share of the pie. “My job is to maintain stability in our long-term plan without any short-term changes. I need to maintain a direction on India where there is tremendous opportunity for a brand like Audi,” he says.

In the process, unlocking the potential here translates into a “strategic opportunity” where Audi believes some important lessons can be absorbed and replicated in other emerging markets. According to Johnsson, India can become strategically important in the long-term to take learnings to Africa, most parts of Asia and all of Latin America.

Audi sold 1.8 million cars in 2015 and is upbeat about this calendar even as the world continues its rollercoaster ride.

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