The German big three! Three luxury carmakers originated from Germany have made a mark for themselves globally, including India and have become a household name. Audi, one of these three companies, is a near 90-year old brand known for its dynamic, feature packed luxury vehicles. Like every other brand, Audi too suffered during pandemic, but picked up the pace banking on the digital initiatives and unique product launches. We got in touch with Balbir Singh Dhillon, Head of Audi India to understand the rough waters Audi had to sail through in 2020 and the various digital initiatives company undertook to bounce back. Here’s our conversation-
How has been previous year for Audi?
2020 was an exciting year for us as we rolled out an eclectic range of products and received an overwhelming response to our new cars. Our flagship luxury SUV and Sedan — the Audi Q8 and the Audi A8 L which were launched in early 2020 received a tremendous response with the first lot of both these cars getting allocated. The power-packed Audi RS 7 Sportback and the Audi RS Q8 have also received a great response and are further solidifying our category leadership. We witnessed month-on-month growth over five months last year with December witnessing the highest sales in 2020. We also launched our entry-level SUV, the Audi Q2 which when launched, received over 100 bookings within just a few days of commencing bookings. We expect this demand to continue in 2021.
What have you learned from the pandemic?
Our learning from the pandemic-driven crisis is that physical buying in addition to the digital approach of online sales will be the way forward. While customers will spend most of their time looking at the car online and customizing it; a physical visit to the showroom will not be discarded.
What’s in bag for Audi in 2021?
We have lined up a host of new launches for this 2021. We kick-started the year with the launch of one of our best-selling models in India, the Audi A4 in January, followed by the Audi S5 Sportback in March. We have already announced plans for launch of our electric cars in India. Our plan is to also bring in a comprehensive range of cars — from sedans to SUVs, ICE variants to electric cars, and models in the volume as well as niche segments such as performance cars. Going forward our focus will also be on pre-owned luxury car business and digitalization.
Audi e-Tron puts the brand in front of EV revolution? What’s your take?
Keeping in line with our electrification strategy, Audi will bring 30 electrified models on sale by 2025 globally with some of these models making roads into India. As a brand, we have decided to go bullish on this topic and will launch our first two all-electric cars — The Audi e-tron and the Audi e-tron Sport back within the next couple of months in the country. We are upbeat and excited about the launch and their prospects in the Indian market. The emphasis from the Government of India to promote electric cars by keeping the GST low and providing various incentives to the EV buyers is also encouraging.
A combination of our global strength, as well as our confidence level in India, gives us a business case to launch multiple models in India. Last year, Audi was by far the largest battery-electric vehicle premium manufacturer among the three German premium brands. The Audi e-tron including the Audi e-tron Sportback is the bestselling electric vehicle amongst the German premium manufacturers. In January the growth continued and we sold 18% more electric cars in January 2021 as compared to last year.
How has customer behaviour post COVID-19 changed?
The pandemic has altered buying patterns and positively influenced digital engagement. There is a shift towards more digital research and Audi was quick to understand this changing buying behaviour. People are expecting information immediately and at their fingertips; it was this shift in behaviour that was the genesis of our push towards Digitalization. With the introduction of online sales and service initiatives, we took digital experiences to the living rooms of our customers and offered them the flexibility to purchase their preferred Audi of choice and even book their next service appointment online. We have a lot more initiatives planned under this pillar of growth and as a brand, we will continue to invest heavily in this area.
How’s Audi accepting Digital sales as the new form of the transaction?
Digital customer-centric initiatives are a key focus area for Audi in India and a key pillar in ‘Strategy 2025.’ For us, it is a journey, not a destination. The world is continuously evolving, and we will continue to evolve and improve the value offering to our customers from time to time to ensure a superlative customer experience. Since the introduction of digital sales and services in May ’20, we have had a real spike in the number of people reaching out digitally; the unique visits on our website have gone up 35% from last year.
Configurations on the website have seen a 50% spike this year compared to the last. 18- 20% of Audi India’s lead generation happened through online channels — which eventually converts into purchases — and this is only growing. For it to reach a significant mass is still some time away but people are warming up to it. We will continue to invest in this topic and further enhance the programs that we have for our customers available digitally, whether it is pre-sales, during sales, or post-sales operations.
Your overall analysis of India’s luxury car market?
The Indian luxury car market has witnessed its share of ups and downs over the last decade. From about 16000 units in 2010 to 40,000+ units in 2018 the market had definitely grown. However, there has been a bit of a downturn in 2019 and 2020. Luxury car sales currently constitute less than 1.0% of the overall passenger vehicle sales in India which is very low as compared to some other markets. We feel that this proportion will increase in the future as the sales of luxury cars pick up pace in 2021 and continue to grow in the next few years to mirror India’s growth story.
The trends of luxury car sales have also been shifting from sales being concentrated in metro cities to other cities. We have witnessed a rise in sales in Tier-II and Tier-III cities. The contribution to volumes is increasing steadily from these smaller cities. Also, propelled by digital trends in the last few years, there has been a shift towards more digital research. The prospective buyers are making decisions basis their independent online research, before visiting the dealership for a car purchase. Consumers are willing to pay for advanced and connected technologies while becoming more environment-conscious and getting more interested in sustainability. Affordable used luxe cars are drawing customers from both metros and non- metros, despite the slowdown.