The 2018 volume of 6,463 units is a decline of 43 per cent from the annual peak sales of 11,192 units in 2015. In the same period, Mercedes has seen 15 per cent growth while BMW’s numbers have surged 61 per cent. A fair part of this growth is obviously driven by the introduction of models and their success. But, the flat performance of Audi has other reasons as well.
“The rise of Audi between 2012 and 2015 was a result of its strong portfolio of sports utility vehicles (SUVs) while others did not have much of a SUV
presence. However, Mercedes filled the white spaces with its GLA range and attracted young buyers. Audi adopted a discount strategy to counter Mercedes and there was discount at dealerships as well to show sales. As a result, Audi customers started anticipating regular heavy discounts and lost confidence on the list price,” said an automobile analyst.
In the last couple of years, a few Audi dealerships in the national capital region (a top market for luxury cars) have shut down. The company has managed to partly make up for the gap with launch of a new dealership recently.
“There are always various reasons why a business closes and there is no pattern. The dealership decisions are business driven. I am happy to share that we have started the operations with sales and service at Audi Gurugram facility last week,” said Rahil Ansari, head of Audi India.
Ansari, who has now spent two years in his current role, has seen numbers come under pressure. He said the automotive business was always cyclic, particularly the luxury segment where buyers look for novelty. Mercedes, however, has visibly bucked this cyclic trend with a dominant position for four consecutive years.
Ansari lists a couple of focus areas for 2019: dealer profitability (which has been our focus are earlier too) will continue to be the focus this year as well and the second is the customer experience, which has to be an unparalleled luxury experience, be it at our showroom or our workshop. “The main focus is not to be the No. 1 in the single parameter of sales. There are many more. Dealer profitability is the key for sustainable growth in the business from a long-term perspective”.
While admitting that the luxury segment has moved to a space of high discounts, which is unreasonable but also not healthy for dealers and ourselves, Ansari claimed Audi does not believe in discounting for the sake of getting volumes.
“Profitability is the key for everyone in the business and we would clearly like to grow on this path together with our dealer partners for a sustainable business for everyone,” he said.