Audi's Marketing Strategies in India

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"Ours is a dynamic brand and we have set the pace for our next level of growth in India. Our product portfolio, innovative marketing initiatives and focus on dealer expansion are some of the prime drivers in this competitive scenario."

-Michael Perschke, Head, Audi India, in 2012.

"The changing demography of the Indian market, with younger customers keen on buying crispy designed cars that offer contemporary features, is helping Audi lead over its rivals. However, the real challenge would in 2013 when all luxury carmakers would fire from all cylinders with their latest models."

-Sageraj Bariya, Managing Partner, Equitorials , 2012.

Germany-based luxury automobile manufacturer's Audi AG's Indian arm Audi India bagged almost 15 prestigious automobile awards in India in 2011 under various categories. (Refer to Exhibit I for various Awards won by different Audi Vehicles in 2011). Michael Perschke (Perschke), Head Audi India, said, “2011 has been Audi's most successful year in terms of sales which surpassed our expectations. The Audi A8 L, R8 Spyder, Audi A7 Sportback, and the business luxury limousine - Audi A6, contributed greatly to making 2011 the strongest year in terms of sales in India.

And now the awards won by these models not only impressively demonstrate their success in India but also reiterate our philosophy of thinking ahead of the curve as well as our ability to bring innovative and progressive products to India." Continuing its successful journey the Audi RS5 won the Performance Car of the Year award in 2012 presented by Top Gear Magazine , while the Audi Q5 won the coveted “Import SUV of the Year 2012" award given by CNBC TV18 Overdrive .

Audi had been present in India since 2004. It sold imported luxury cars through three independent dealers in Delhi, Mumbai, and Bangalore. Later, in March 2007, Audi officially entered the Indian premium car segment as a division of Volkswagen Group Sales India Pvt. Ltd in Mumbai and started assembling a few of its models in the plant of Škoda Auto India Private Limited (SAIPL) at Aurangabad. Initially, the Audi A6 was assembled at the plant, followed by the Audi A4 series from 2008. “Starting our own production there is the best way to adequately serve such a promising growth market like India," said Rupert Stadler (Stadler), Chairman of the Board of Management, Audi AG.

The company followed an aggressive marketing strategy to gain a foothold in the Indian luxury automobile market. It bought in several new products, launched premium dealerships across the country, and ventured into Tier II and Tier III cities. Audi positioned itself as an aspirational and inspirational brand among youngsters. In 2011, it sold 5,511units. The following year it sold 9,003 units as against the target of 8000 units. It surpassed Mercedes Benz in 2012 to become the second largest selling luxury automobile brand in India next only to BMW , whose sales were 9,375 units in 2012.

Its market share in the luxury car segment grew from 25% in mid-2011 to 34% in November 2012. , On Audi's strengths in India, Perschke said, “Audi's brand network, varied product portfolio, exclusive marketing activities, and after sales services add to its strong performance in India." Encouraged by its success, Audi aimed to become the top luxury automobile in the country by 2015.

But analysts cautioned that though Audi had become a name to reckon with in the premier segment in the Indian Automobile industry, it could face fierce competition from other luxury car makers which were already present in the country as also others which were planning to enter the market. They added that the higher taxes imposed on luxury cars and SUVs and the hike in import duty on completely built units imposed in the Union budget of 2013, could deter Audi's plans to sell around 10,500 cars in 2013. According to Perschke, “2012 was a stellar year for Audi, but we are confident of surpassing that and making 2013 more rewarding. However, the recent announcements in budget may dampen the spirit of customers."

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