Audi weighing options for luxury small car launch in India

German luxury car maker Audi is weighing options for the introduction of its best selling small car A3 and upcoming A1 in India.

Although, according to the Audi’s preliminary assessment the Indian automotive market is still not ready for the luxury small cars, the company is waiting for the appropriate time to go ahead with the launch of such cars, possibly in 2010, according to a top company executive.

“Market dynamics in countries like China and India are fast changing. In the emerging markets, it would take just half the time it took to develop a market for such cars in Europe,” Mr Martin Birkner, Vice-President (Marketing), Audi India, told Business Line, hinting that the company’s current plans could be reviewed.

“We have no plans to sell compact cars at least until 2010 as we first want to establish ourselves as a luxury brand. But things can change according to the market situation,” he said.

Audi’s entry level luxury car A3, which is credited with creating an entirely new market segment of premium compact car in Europe, and the upcoming super mini car A1, claimed to be highly economic with its hybrid powertrain, are considered to be best fit for its strategy to expand its presence in developing markets. A1 is likely to be launched in 2009 or early 2010.

China
Faced with the stiff challenge from BMW and Mercedes-Benz in China, Audi which dominates the luxury segment in that country is mulling the launch of A3 in China this year. Audi sold more than one lakh cars in China in 2007.

Indian market
In US market, A3 price starts at US $25,930 (Rs 11.25 lakh) while the price of A4, the least expensive Audi car available in Indian market, starts at Rs 29 lakh. Audi, part of group, seems to be following its top-down strategy. Volkswagen came to India with Passat in the luxury segment, launched Jetta in the D segment and is working on an India-specific premium compact car on Polo platform.

Another group company Skoda has made significant inroads with premium hatchback Fabia, which sells around 600 units a month. “As a group, we have presence in almost every segment. We are in no hurry to launch Audi’s compact cars. Our focus is currently on establishing our luxury brand image,” he said.

“In India there is no market for small expensive cars. We know that it will be growing. But now, it is a little early to launch such products,” said a source in Audi India.

However, in its long-term India strategy, Audi cannot do without A3. Out of 9.64 lakh cars the company sold globally in 2007, A3 contributed 2.31 lakh. Audi sold 350 cars in India in 2007. In the current year, up to July, the company sold 595 cars.