Interview with Michael Perschke, Head-Audi India

ZW: How would you describe the journey for Audi India over the past five years?

Michael: The last five years have been exciting, however if you speak about the journey for Audi in India, I will have to say that it started much earlier all the way back in 1985 when Ravi Shastri won his Audi. That moment in history entrenched the Audi brand name in India. Post that, we have had two independent dealers operating in India prior to the set up of Audi India in 2007. Those dealers also did their bit to help in the initial days of establishing the brand name. 

ZW: How have Audi India’s sales figures been year-on-year?

Michael:  In our first year (2007), Audi sold only 370 cars. In 2008 we managed to sell a total of 1050 vehicles. This March alone we have sold over 1002 units so there is no doubting the fact that we have come a long way. From selling a little over 1000 cars annually to doing a similar figure in a single month! This success can be attributed to the fact that we have got the basics right which included a decent product portfolio as well as a suitable dealer network. Audi India has also done a lot of events, we have a great communication strategy and have applied a progressive strategy to closing the gap with our competition and have already managed to secure a solid number two position in the market. Our plan is to go ahead and achieve the number one position by 2015 and that is where our focus lies. 

ZW: Audi has always followed a top down strategy as compared to the aggressive pricing strategy played by the competition.

Michael: We, as Audi, are a younger brand when compared to the core competitors in the Indian context. We could either go bottom up or top down, but when you want to establish a brand people look at your halo models. These are the models that help build a big dream for potential customers. Our strategy began with us establishing our halo models which include the A8, Q7 and R8 as the ultimate aspirations. These cars build the dream, while customers started small with cars such as the A4 or even the Q5 to a certain extent however their target in terms of achievement would be the higher models and they work their way up the order. 

Apart from that, Bollywood has helped as filmstars such as John Abraham, Bipasha Basu, Katrina Kaif, Gul Panang, and of course Salman Khan have all showed their love for these machines. In doing so, they have made vehicles such as the Q7 a style icon and this has also added to its aspirational value. 

ZW: Audi India hasn’t stepped into the ring to fight the competition in a price war. Is that also part of the strategy? 

Michael: According to me, price is your weakest marketing instrument. If you communicate only on the price front, you loose out on the other ‘Ps’ namely product, place and promotion. With a price war, product suffers the most and once that is lost, then the game is over. We have always allowed our products to have substance and therefore we have been more expensive than the competition, yet we sell and as the numbers show we are growing as well. If you bring it down to a price war, then there is really nothing left as all that will matter is a number and not the product, quality, or consumer promise. We can’t afford to do that to our brand. 

ZW: Where is Audi India heading in the immediate future? 

Michael: It depends on what you define as your timeline. Our game plan goes to 2020 and I can speculate on what the market will be like in the next eight years. To give you an example, we sold around 5,000 cars in China in 1998, however last year we sold 3,10,000 cars in China. Last year we sold 5,000 cars in India, and though I don’t expect India to grow at the same exponential growth as there are infrastructure issues, but in ten years from now the market for us can be easily around the 50,000 units, so we can safely say that we are looking at a tenfold growth in the next decade.

Get latest updates on
the automobile community

Login Now

ZW: Is Audi India looking at enhancing its infrastructure in India? Are there plans for a new production facility or will Audi continue to share the Skoda unit? 

Michael: Today we share the manufacturing facility with Skoda Auto India. At that plant we assemble the A4, A6 and Q5 however we are currently building another assembly hall to assemble the Q7 plus another model. This will eventually give us a portfolio of five locally assembled vehicles. This isn’t the end and can be labeled as a mid-step. Currently we will look at which of our global models will allow us in India an even higher and faster scaling up of our production capabilities. That is something we haven’t made a decision on and we are still analyzing the situation. Indian market is volatile, so we need to build a solid model strategy which allows us to define one or two product platforms that will take us to the next level. Also, we need to look at a model that will allow us to achieve serious production targets of at least 15,000 units on a single model in order to be feasible in the Indian context. This is something that we are doing deep research on. 

ZW: Finally, from a product perspective, what does Audi India have up their sleeve over the next few years?

Michael: From a product perspective, we have already showcased the Q3 as well as launched the new A4. The Q3 (Read : Audi Q3 First Drive) is targeted to hit dealerships by June this year. Apart from this, we are also exploring a number of ideas which include introducing a higher performance version of the A4, namely the S4, as well as the S6. That’s about all that can be revealed for now.