Luxury car segment will observe a 20-25% growth in EV penetration: Head of Audi India

The term

electric vehicle

has gained popularity in India, where new models are often introduced by the nation's automakers. The luxury automobile makers have also switched their base from diesel and petrol cars to hybrid and electric vehicles, betting on India's EV journey. According to Balbir Singh Dhillon, Head, of Audi India, as the nation progresses towards EVs, the luxury automobile segment's participation in the electric mobility area would increase to 20%-25% by 2025-26.

Citing Dhillon, Fortune India reported, "While India is heading in the direction of electric mobility, I think the luxury segment penetration in electric mobility will be much faster. Because this will also be a phenomenon in India when the majority of global luxury automotive manufacturers transition to electric mobility. Accordingly, we do think that the 5% electric vehicle penetration rate in the luxury market in India would increase to 20-25% by 2025–2026 and continue to expand from there, adds Dhillon.

Currently, the company's lineup of electric vehicles includes the Audi e-tron. Audi E-Tron is available in a variety of models, including the 50, 55, Sportback, GT, and RS e-tron GT. This year, the business intends to introduce new items to the Indian market. The Q8 Etron, Audi India's next electric vehicle, will be on sale in the second half of this year, the company has previously said.

"We will either introduce new items or new versions this year. Sportbacks, sedans, SUVs, and sports vehicles are all part of our extensive global lineup. Additionally, many body types are accessible on a worldwide scale. Although we are experimenting with our goods, there are some market sectors where clients prefer SUVs” Dhillon added.

Currently, just 1% of all vehicles sold in the nation are in the luxury car sector. According to Dhillon, the luxury automobile segment in the Indian market is still in the region of 1%–1.5% compared to other South East Asian economies where luxury vehicle penetration has persisted to close to 6% or occasionally up to 20%.

However, according to Dhillon, India has a lot of untapped potential and the luxury market will continue to expand over the next 20 to 30 years. "India has a lot of untapped potentials, and we expect the luxury market to develop steadily over the next 20 to 30 years. And for that reason, we'll keep making investments and bringing our consumers more and more goods. We definitely think India is a market to be in for the medium to long term, and that's been our aim -- to provide new goods, grow with our partners, and build on client loyalty," adds Dhillon. The premium automobile maker has 29 shops spread across 24 Indian cities.

The luxury automobile market, which in the past struggled with concerns including a scarcity of semiconductors and supply-chain problems, has gathered up steam in recent quarters. By selling more than 9,500 units during the January to March quarter of 2023, the luxury automobile sector had a 10% year-over-year (YoY) increase. Audi India had a 126% YoY increase in sales as a result. Audi India's H1 2023 sales increased 97% year over year (YoY) to 3,474 units from 1,765 units during the same period in 2022.

“Our performance in the first half of the year laid the foundation for a successful second half of the year, despite supply problems and rising input prices. Audi Q3, Audi Q3 Sportback, Audi Q5, Audi A4, and Audi A6 are among the models that are in high demand. Our best models, such as the Audi Q7, Q8, Audi A8 L, Audi S5, Audi RS5, Audi RS Q8, and Audi RS e-tron GT, are also doing well on the market. With the addition of the Audi Q8 e-tron to our electric portfolio, we predict even greater success in this market.” adds Dhillon.

The corporation places the blame for this increase in sales on the introduction of new models, the expansion of the used vehicle market, strong customer loyalty, as well as a change in consumer mood in tier-II and tier-III cities. "The new models that we have introduced have contributed to the rise. The sector is likewise expanding rapidly. Additionally, we enjoy a high level of client loyalty, and we are expanding our used car industry, adds Dhillon.

"Customer attitudes are changing in Tier II cities and beyond in India. Initially, we exclusively sold in the top five metro regions; but, as of late, we have expanded into tier II cities and beyond. As a result, our presence in metro regions has decreased in contrast to tier-II and tier-III communities” he says. The luxury automaker expects that despite a decline in the proportion of sales in metro areas, Audi India's overall sales would continue to increase in the first half of 2023.

According to the German automaker, Audi India's SUV (sports utility vehicle) lineup has dominated sales over the past six months.

According to Dhillon, the sector accounted for 60% of Audi India's first-quarter sales. The company's SUV lineup includes the Audi Q3, Q5, Q7, and Q8 models. According to Dhillon, of these, the Audi Q3 has grown to be the most desired and well-liked product by consumers. In August of last year and in February of this year, the business introduced the Audi Q3 and Audi Q3 Sportback.