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Audi to drive into smaller cities for expansion in India

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As it gears up for the next phase of expansion in India, German luxury carmaker Audi is keeping a keen eye on smaller cities considering the high growth rate it has witnessed in non-metros.

Apart from bringing in new models, the company is also preparing to expand its used car business under Audi Approved Plus with plans to take the total number of outlets to 10 in the next 12 months from three at present.

“In 2007 when we entered, we set up plans which were good for the initial years. Now we are preparing for the next phase of expansion in India,” Audi India Head Joe King told PTI.

While he did not share details on investments for the next phase, he said, “it will be announced by the headquarter soon and it will be all-encompassing for the longer term, which includes fresh production capacity and new model line up.”

King said the company will continue with its strategy to be “closer to customers” as it expands in India with a special focus on the smaller cities.

“Non-metros are doing very well for us. The response that we have received from new places like Guwahati and Ranchi are very encouraging,” he said, adding Audi India would soon open its showroom in Rajkot.

The company is also considering opening showrooms in Jammu and Dehradun and plans are being firmed up at the moment, sources said.

“Although the base is smaller, in tier II and III cities the sales growth rate is around 20-30 per cent, while in metros it is 10 per cent,” King said while elaborating on the potential of smaller cities.

On the used car business, King said the company has been gaining good traction.
“Our outlet in Gurgaon has been doing well and we are now looking for more market

penetration and the plan is to roll out more outlets of the Audi Approved Plus,” he said.
The company will Audi Approved Plus outlet in Jaipur as part of its plans to have 10 such showroom in 12 months.

When asked if the company is confident of defending its top spot in the luxury car market in India with rival Mercedes giving it a stiff competition, King said the focus is on “profitable growth” and executing its strategy.

“We are confident of our products and let’s see what the numbers are at the end of the year,” he said.

On a fiscal basis, Audi India sold 11,292 units in 2014-15 and retained its top position ahead of rival Mercedes-Benz, which clocked sale of 11,213 units.

However, in the January-March quarter it fell behind the rival at 3,139 units as compared 3,566 units sold by to Mercedes-Benz.

Audi plans to launch a total of 10 products in India this year as it looks to fend off stiff competition from rival Mercedes-Benz.

It had recently launched sedan A6 Matrix priced at Rs 49.5 lakh (ex-showroom Delhi). The company has launched the new Audi Q3, Audi R8LMX, the new Audi TT Coupe, the new Audi RS 7 Sportback and RS 6 Avant so far.

Audi has an installed capacity to produce 14,000 units annually on a single shift basis in India. It sells various popular brands including sedans, A3, A4, A6 and A8 and sports utility vehicles Q3, Q5 and Q7 among others.

PTI