Audi India for one has never shied away from stating that it wants to be number one among the luxury marquees in the country. And it hasn't tried to hide behind a moral curtain either, just in case it failed to achieve its objective. I guess this had something to do with the confidence that Audi had both in its product lineup as well as its strategy at the retail end of things.
And it surely has paid off because Audi India with sales of 2616 units in the first quarter of this calendar has not only registered over 15 per cent growth compared to the same quarter last year, it has also now become the number one luxury car maker in the country in sales volume.
But, it obviously had to work for it given that BMW did not make things easy for the carmaker from Ingolstadt. The Bavarian automobile manufacturer had the products, the coverage and the brand backing which saw it overtake Mercedes years back and then hold on to the number one position for several years.
But, last year's annual sales results did serve as a warning for BMW; it might have held on to the number one position, but the difference in numbers between Audi and BMW was quickly diminishing.
So, how did Audi manage to move ahead in the game? Well for starters, it had the right product portfolio in place, which its other competitor, Mercedes, is still trying to formulate and launch. It has a good entry-level car in the A4 and with the model's fleet sales, it has contributed well to the companies overall numbers.
Then there are the SUVs which really got the brand the momentum it needed. The Q7 when launched was a hot seller, and then the Q5 arrived and simply changed the rules. Mercedes in order to compete with the Q5 had to cut the ML's price tag, and BMW wasted no time in bringing the new generation X3 into the country.
Then the Q3 arrived and Audi's rise to the top was guaranteed. According to Michael Perschke, Head, Audi India, the A4, the A6 and the Q3 are very popular models in the company's lineup in India.
A strong portfolio is key, we agree, but what Audi did at the retail level, ensured it got to number one, and in pretty quick time. The sales staff at dealerships were given a clear mandate to hard sell. And not just to convert BMW and Mercedes prospects, but also those looking at cars like the Volkswagen Passat and the Skoda Superb.
There were relentless follow ups, emails, and even at the slightest hint of hesitation on the prospect buyer's part, new options were thrown up including tailor made finance schemes. But, when all else failed it was the plain Jane discounts that really nailed it for Audi.
But, being number one is an Audi mandate not just in India, but globally. Rupert Stadler, CEO, Audi AG has clearly stated time and again that he wants to see Audi on top by 2020. But, he has also made it clear that he doesn't want to buy market share and would therefore not indulge in discounting. According to Stadler, heavy incentivising harms residual value of cars, and it's the last thing that he wants to do.
Now, this is of course in contrast to what Audi India's trump card has hitherto been. But, the change in approach at the retail end are already there to see. Audi dealers are clearly stating that they are not going to be discounting as much as they did earlier.
A dealer we spoke with said that since the company had now achieved the number one status, the discounts won't be as easy to come by. But instead, they would offer value adds to make the ownership experience much richer.
At a very basic level this could mean free accessories, probably even an invite to a celebrated Audi event within India like the sports car experience at the Buddh International Circuit while higher up the order this could probably go as far as an invite to travel north of the Arctic circle for a drive experience in icy conditions and dining on reindeer steaks.
Perschke believes the growth for Audi will now be based on four pillars. Innovative marketing activities like the sports car experience at India's only Formula one track is course one of them.
He adds, the remaining three pillars will be further expansion of the company's product lineup, dealership expansion which will end up covering 34 locations and manpower expansion. The plan is to hire a total of 1000 additional people for corporate, production as well as at the dealership level.
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