EV-conducive environment is inevitable in India: Audi India chief

German luxury car maker Audi is all set to launch its all-electric SUV e-tron in India on July 22; it had recently opened bookings, too. This will be the third luxury electric SUV to launch in the country, going head on with Mercedes EQC and Jaguar i-Pace that are already in the market. In a recent interaction with THE WEEK, Balbir Singh Dhillon, the head of Audi India, threw more light on e-tron, the electric car market, impact of COVID-19, and Audi’s plans in India. Excerpts:

The pandemic had a big impact on the auto industry in 2020. A second wave of COVID-19 hit in April. How is 2021 going to pan out?

We kick-started 2021 with the launch of Audi A4, one of our best-selling models, in January, followed by the launch of the striking Audi S5 Sportback in March. Sales were robust in the first quarter of the year. Products, including Audi A8, Audi A6, Audi A4, Audi Q2, Audi Q8, and our RS models—Audi RS 7 Sportback and Audi RS Q8—received good traction. Also, the first three months of the year witnessed good demand for the auto industry; this, however, fell due to the unfortunate second wave of the pandemic.

While the demand for vehicles remains strong, we also foresee some industry challenges related to supply chain, dealership activity and customer movement in the coming months, given the localised restrictions in several markets.

Audi is finally set to launch the e-tron EV this month. What took it so long?

The global pandemic last year pushed back our launch timelines. The unfortunate second wave in India forced us to push the launch of the Audi e-tron and the Audi e-tron Sportback.

Since this is a new kind of product, we contacted existing customers to address concerns and gain insights.

We were readying ourselves for this big initiative and preparing ourselves to manage this new technology. The focus has been on training manpower and ensuring the readiness of spare parts and components. Besides, we were also studying the current work being done by private players in EV infrastructure development and working on our strategy accordingly for India. Now we feel is the right time to launch the car in India.

What’s the USP of the Audi e-tron?

For us, the Audi e-tron is not just one car, but a brand in itself. We want to establish the e-tron brand strongly right from the beginning. We are working on making the ownership experience of electric cars as peaceful and easy for our customers.

A combination of technology, space, and comfort, the Audi e-tron is a luxury electric SUV with a range that is suitable for everyday use. It continues to be the top-selling electric SUV in Europe. There is a lot of brand positivity and we are confident that the Audi e-tron will definitely be loved by our customers in India.

Audi's all-electric SUV e-tron

Audi e-tron will be the third luxury EV to launch in India, although the wider EV market is yet to take off here in a big way. What's your assessment of the market?

As a brand, Audi is fully committed towards EVs and the EV story in India. Electrification will be a journey and we do not expect sales to spike immediately. The buyers of luxury electric cars are first-movers and early adopters, and they know the merits of going electric. There will be early adopters and late buyers; we will address their needs one by one.

It would be fair to state that the EV industry is evolving in India at the moment and volumes may increase multi-fold in the coming years. Electrification is a long journey and perception issues regarding charging infrastructure and range anxiety will be resolved as more people adopt EVs.

There has been a strong push and incentives by the government for the set-up and sale of EV infrastructure. Various manufacturers as well as private players are working towards building an EV-focused infrastructure across the country. The amalgamation of all these factors leads us to believe that a culmination in an EV-conducive environment is inevitable in India in the coming years.

Input costs have gone up quite a bit in recent months forcing automakers to raise prices. How has Audi countered the inflationary headwinds?

The rising input costs and currency fluctuations have put a strain on our cost structures and we were forced to make amends to the prices of our cars at the beginning of the year. While we have tried to absorb the impact at various levels, we were compelled to make a minor price revision.

Continuing our focus on customer centricity, we have ensured that the impact is as minimal as possible. We are offering several service-related packages that will ensure ease of ownership for our customers.

Audi has announced Strategy 2025. How is this going to pan out from an India perspective?

Strategy 2025 has a clear roadmap that aims to strengthen the Audi brand in India. It is based on four key pillars—customer centricity, digitalisation, products, and network.

On the product side, our emphasis is on introducing a comprehensive range of cars — from sedans to SUVs, ICE (internal combustion engine) variants to electric cars, and models in the volume segment, as well as niche segments such as high-performance cars.

On our network front, we are well-placed to cater to market demand. Under our ‘Workshop First’ approach, we are entering tier II and tier III cities with a ‘service first promise’. This approach entails inaugurating a workshop first, followed by a gradual plan to establish a showroom.

Overall, we want to focus on building a profitable and sustainable brand along with our dealer partners. We want to be the most premium progressive brand.

In addition to our ‘Workshop First’ vertical, our focus this year will also include the Audi Approved: Plus — our pre-owned car business. We currently have seven Audi Approved: Plus showrooms across India and we will continue to expand as per market demand.

How big is India for Audi among major global markets and how much does Audi plan to invest in India in the next 2-4 years?

India is one of the key markets of growth and we are confident about the potential this market has for premium cars in the medium- to long-term. In terms of investments — we are sufficiently placed to cater to future expansions.

The Indian luxury car market comprises approximately one per cent of the overall Indian car market. This is still a relatively small percentage for a market the size of India and there is a lot of potential that is yet to be tapped. As and when we feel the need, our investments and infrastructure will keep pace accordingly.