The share of diesel autos in luxurious automobile gross sales in India shrank to a report low of 35% in 2023. As just lately as 2019, diesel fashions accounted for practically 80% of auto gross sales. The largest beneficiary of that is Audi, which has cornered a 31% share of the posh petrol automobile section, in opposition to BMW’s 28% share and Mercedes Benz’s 26%.
The shift has been central to Audi’s revival in India. In 2023 it posted 89% development in gross sales at 7,931 items – its greatest annual gross sales efficiency since 2015, when it offered 11,192 items. That was additionally the yr it misplaced its number-one place to Mercedes Benz.
Audi misplaced extra floor in subsequent years after it exited the diesel sediment completely owing to Volkswagen Group’s ‘dieselgate’ emissions scandal of 2015-16. At one level nearly 70% of Audi’s gross sales got here from diesel, so the scandal hit its enterprise laborious. Between 2019 and 2022, it offered simply 5,000 automobiles a yr.
“The efficiency final yr shouldn’t be seen in isolation. It’s on the again of our rebuilding technique over the past 5 years,” stated Balbir Singh Dhillon, head of Audi India.
Whereas Mercedes and BMW are but to formally announce their annual numbers, they’re more likely to be round 16,000 and 12,500 items, respectively. Audi has some catching as much as do.
Of the three, Mercedes at the moment depends essentially the most on diesel fashions. Based on the federal government’s Vahan dashboard, diesel fashions accounted for greater than half of its gross sales in 2023. For BMW, diesel fashions accounted for a 3rd of complete gross sales.
Dhillon believes as soon as the trade share of diesel drops beneath 20%, which might occur within the subsequent two years, it received’t make sense for any producer to introduce extra diesel autos.
Within the fast future, nonetheless, development is more likely to be elusive for Audi. The disaster within the Crimson Sea has disrupted provide chains – a recurring theme for the reason that pandemic – and is ready to delay shipments of elements from Europe and North America, affecting its manufacturing.
“Within the first quarter of 2024, volumes might be decrease as in comparison with final yr. The delay may very well be between two and 6 weeks and consequently the impression on quantity may very well be 15-20%,” Dhillon stated. “We will make up for it in Q2 or subsequent quarters however it is rather fluid. Projecting how 2024 is more likely to be presently is tough but when provide isn’t a significant constraint, the trade ought to nonetheless see double-digit development this yr.”
One section the place Audi lags its friends is electrical autos. The outright chief right here is BMW (EVs accounted for 10% of its volumes). For Mercedes and Audi this quantity was round 3%, however with Mercedes’s larger volumes, it offered greater than twice as many autos as Audi.
“We’re constrained on worth. Our 4 EVs are imported and value ₹1 crore. Sooner or later, we’ll launch extra automobiles and likewise assemble them in India, which is able to allow us to supply them at extra inexpensive costs,” Dhillon stated. “By 2028-29, nearly half of our gross sales in India might be electrical.”
With practically 47,000 items offered, the posh automobile market in India had its best-ever yr in 2023. However its share within the total passenger automobile section, which topped 4 million items, was below 1.2%. India’s low per-capita earnings of $2,500 and excessive taxes (luxurious automobiles entice 50% GST) have hindered the section’s development. Excessive import duties of 70-110% additionally play spoilsport for super-luxury and high-performance fashions.
“We come into the image when someone earns $30,000-35,000 every year. In India there are lakhs of people that earn this a lot however it’s nonetheless a small share of the inhabitants,” he stated. “In developed markets the share of luxurious automobiles is 8-10% and a few creating economies like Taiwan have a 20% share. We’re but to cross even 2% [in India] so there’s substantial headroom.”
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Printed: 07 Jan 2024, 06:48 PM IST
Supply: Live Mint