Audi gears up for fresh investment in India

AudiSource: Times of India, Sept 03, 2015

NEW DELHI: German auto major Audi is set to pump in fresh investment and enhance its manufacturing set-up in India as the company eyes sales of over 50,000 cars by 2020.

A senior official in the Volkswagen group – of which Audi is a constituent – said the fresh investment for India will be announced “very soon” by a board member from the brand’s headquarters. “The plan is to have a bigger set-up in India as the market is seen as key and strategic,” the official said, requesting anonymity.

When contacted, Joe King, the head of Audi in India, said the company is bullish on India, but did not confirm any investment numbers. The company, he said, is not perturbed by the loss of ground to compatriot Mercedes Benz in the first half of this year and hopes to finish the full-year “ahead” of its rival.

“We had a market share of 34% last year, and we are confident of having this dominant share even by 2020,” he told TOI in Udaipur recently after the company drove in the new-generation version of A6 sedan.

The company sold 10,851 units last year, a shade higher than the 10,201 units sold by Mercedes. However, in the first half of this year, Mercedes raced ahead with sales of 6,659 units and a growth of 41%. Audi has refused to disclose its numbers for the period, and has said it will only announce full-year numbers.

The luxury car market in India is small at present, accounting for sales of around 33,000 units last year. It is nearly 1% of the overall passenger vehicle market and officials feel that its share will go up as disposable income rises and companies drive in new models and announce attractive financing schemes. Audi had entered India around 2007, and so far operates out of group company Skoda’s factory in Aurangabad. Its investment till now is pegged at around 30 million euros (Rs 220 crore) and on a single shift, the company can produce 14,000 units on an annual basis.

The Volkswagen group sees Audi India’s operation as “strategic” and something that needs to be expanded, the senior official said. “The poor performance of the group’s other two brands, VW and Skoda, has also meant that Audi gets a push since it is doing well.”

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