German luxury car manufacturer Audi is set to overhaul its product launch strategy in India, awaiting clarity on the significant import duty reductions expected under the India-EU free trade agreement, which could dramatically alter the competitive landscape for premium vehicles.
Key Points
- Audi India will recalibrate its product launch strategy once precise details of India-EU FTA import duty cuts are revealed.
- The India-EU FTA could reduce import duties on European cars from 110 per cent to 10 per cent under a quota system, potentially expanding Audi's model range in India.
- The agreement may allow Audi to introduce more entry-level, niche, middle-level, or sports cars to the Indian market.
- Luxury car sales in India have seen muted growth, with Audi India's retail sales declining from 7,931 units in 2023 to 4,510 units in 2025.
- Audi India anticipates growth of 5-6 per cent in 2026, aligning with the broader luxury car market, and is focusing on its pre-owned car business.
German carmaker Audi will revisit and recalibrate its product launch lineup in India once the precise details of import duty cuts under the India-EU free trade agreement (FTA) are revealed, said the country’s Brand Director Balbir Singh Dhillon on Tuesday.
Dhillon -- while talking to Business Standard after launching the SQ8 performance sport utility vehicle (SUV) -- said it would be "very fair" to expect a rethink in product planning once there is clarity on the final framework on import duties under the FTA.
"At least once the fine print is there, then we are able to strategise," he noted, pointing out that uncertainty around timelines and implementation continues to shape both company decisions and customer expectations.
Impact of India-EU FTA on Audi's Strategy
The India-EU FTA, signed on January 26 this year and expected to be ratified by early 2027, has provisions to slash import duties on European cars from about 110 per cent to 10 per cent under a quota-based system, potentially widening the range of models that companies like Audi can bring into India. However, precise details are not clear right now.
Dhillon said the agreement could open up more options across segments.
"We’ll see if we are able to bring more entry-level products or niche products, or middle-level or sports cars," he said, adding that the company is already assessing possibilities depending on how the duty structure evolves.
Challenges in the Luxury Car Market
His comments come at a time when the luxury car market in India has seen muted growth, with industry volumes largely flat at around 52,000 units in 2025.
Audi India’s own retail sales declined from 7,931 units in 2023 to 5,816 units in 2024 and further to 4,510 units in 2025.
Dhillon attributed the sluggish growth primarily to rising prices, which have made entry-level luxury cars significantly more expensive.
"The entry to luxury has become dearer and dearer for the last couple of years," he said, citing commodity costs, shipping expenses, and currency depreciation against the euro.
He noted that the benefits of GST rate cuts -- which were implemented last September -- in the luxury car segment have been largely offset by currency movements.
As a result, entry-level luxury cars that were priced at ₹ 35-40 lakh about five years ago now cost around ₹ 50 lakh, he added.
Future Outlook and Customer Loyalty
On the growth outlook, Dhillon said Audi India expects to expand broadly in line with the luxury car market at around 5-6 per cent in 2026, with a focus on sustainable growth and profitability.
He also highlighted improving customer loyalty, with about one in three cars now sold to existing Audi customers, compared to roughly 15 per cent five years ago, and said the company is strengthening its pre-owned car business to tap demand that is currently priced out of the new car segment.
Feature Presentation: Rajesh Alva/Rediff
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