New Delhi: Benoit Tiers, managing director of Audi India, has just come of stellar year for his company. The global slowdown had no effect on his company’s sales, which surged in excess of 50%.
Tiers, 39, now plans to take Audi beyond the large cities into smaller towns such as Lucknow and Coimbatore. He believes there is a market in these places for Audi cars that start at Rs26 lakh and go up to Rs53 lakh. Edited excerpts:
Road to success: Audi’s Tiers says the economic crisis did not hurt the car maker too much. He expects 2010 to give a thrust to the brand.Ramesh Pathania/Mint
2009 was a very good year for Audi as your sales crossed 1,500 units in only your first full year of operations. Were you surprised by the growth?
Yes, a little bit because the (financial) crisis hit worldwide and we believed it would take more time for India to recover but the Indian market is unbelievable. It has recovered faster.
I think in India, we have found the right way. We have established a factory. We have established dealerships. We’re in 12 locations in India. We’re going to open more dealerships. We have imported our cars as soon as we could. Overall, it’s a good start but it’s just a start.
The story for Audi in India is just beginning. We do see a bright future. The market will grow.
Most of your dealerships are in the metros and the larger tier II cities. You spoke about expanding them. Will you push deeper into smaller towns?
First, we’re set to open dealerships in a few cities—Chennai, Ludhiana, Jaipur as well as a second dealership in Mumbai and a second dealership in Delhi.
On top of that, we’re starting discussions in Lucknow, Coimbatore, Nagpur, where the demand is beginning. Customers come to us and say I’m living here, I already have an Audi, I would like to have some support. There’s no rush as the dealerships have to be profitable for our dealers. But, definitely, we will go to these cities.
What peculiarities of the Indian luxury car market have you noticed in your time here? What have you learnt from this?
The first learning was very simple. Our customers don’t drive the cars themselves. It may sound very normal to you but coming from Europe we had to adapt very fast. The first thing we did was increase the equipment in the car so that our customers have a better image of the car. The second learning is that the infrastructure is different. So we have adapted our cars to the road quality here.
Indian luxury buyers are generally willing to pay what you ask for a car but they must truly believe they are getting their money’s worth… How price conscious are Indian buyers?
They’re price conscious but they’re also passionate. I think the good thing about the brand now in India is that people recognize the brand as it is. When we started in 2007, the brand awareness of Audi in India was 2%, that is 2% of new car buyers in India knew Audi as a brand. In 2008, we did the same study and it moved to 13%, which is a huge step. We don’t have a result for 2009 as yet but I know it has increased again.
Audi assembles the A4, A6 and also plans to start assembling the Q5 model in India. As the cars get more and more popular, do you plan to assemble any more models in India?
So far, we haven’t taken any decision on this but if there is a potential and the product can be assembled in our Aurangabad facility, we will try to do it.
There usually comes an inflection point after which sales of luxury cars in any particular country zoom. It happened in China and again in Russia. When do you see that happening here?
Unfortunately, I don’t have a crystal ball but I have a feeling, and this is just my feeling, that India will grow faster than China. It took 20 years in China to go from zero cars to 150,000 cars in 2009. I have a feeling that could happen faster here.
Audi has showcased the Sportsback concept car at the Auto Expo. Why did you choose to bring that car to India?
India is such an important market for us that we wanted to showcase the Sportsback concept for the first time in Delhi to get customer feedback on what we’re preparing. I’m here also to listen to what customers say about this car. That will help us decide on our future developments in India with the car. I have very positive feedback on the car. I’m sending the feedback to Germany so that, hopefully, we can get the car to India.
What changes have you made to Audi cars in India?
We learnt when we arrived that customers would like some changes to the car and we have made a few changes. The suspension systems were adapted to the road conditions. This makes them more comfortable than the same cars in Europe. We have a remote control at the rear of the car so that they can use audio system from the back. But when customers buy an Audi, what they want is an Audi. So we don’t change what the brand is about; we just make slight adjustments.
The luxury car segment was also hit by a lack of financing options that were available to customers during the slowdown. What is the situation now?
To be frank, I cannot say we have been hit by the slowdown. But despite that more than 50% of the customers are financing the cars. We are established in India and our subsidiaries Volkswagen Financial Services, which provides EMI (equated monthly instalment) options to our customers. I must say this is working well. We will expand this to extended warranty packages, insurance programmes, and management packages.
The crisis did not hit us too much and I think 2010 will definitely be a very, very big boost for the brand. We are heading towards 2,200-2,500 cars in 2010. That could be bigger but that’s the target we have set for ourselves first.