- Will focus on localisation rather than paying higher duty on import

- The luxury automobile sector currently accounts for just over one per cent in India

German luxury car manufacturer, Audi is reportedly considering scaling up manufacturing in the country. As per a media report, Balbir Singh Dhillon, Head of Audi India, has stated that the company plans to ramp up the local manufacturing of 80-85 per cent of the cars sold in India. The company currently manufactures only two sedans in the country – the A4 and the A6. The decision will save the company from paying a high duty on direct import.

The luxury car brands have blamed stringent import duties as the reason behind limited demand. For nearly a decade, the luxury automobile sector reportedly accounts for just over one per cent of the overall market. As stated to the media, Dhillon said, “All our customers are well connected, very well-travelled all across the world, they know what luxury is, they know the price of these cars outside of India. Therefore, it becomes extremely challenging for us to convince these customers to pay twice the price that they would have gotten abroad. So, this is one of the biggest challenges we face. Even if we look at South-East Asia markets, the luxury segment revolves around five-eight per cent.”

The company further believes that the current low market share is also an indicator of strong growth potential in the country. If the duties are lifted, the luxury car volumes are likely to grow exponentially. That said, Audi will continue to invest in India and focus on localisation. The company plans to continue introducing new products to keep the customers engaged.

Source - HBL