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This article was first published 9 years ago  » Business » Audi sets Indian roads ablaze as it races ahead of Merc

Audi sets Indian roads ablaze as it races ahead of Merc

By Swaraj Baggonkar
Last updated on: January 09, 2015 10:29 IST
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Two of the three luxury marques have ridden high on compact cars, be they sedans, hatchbacks or crossovers, as indicated by the 2014-sales tally

Audi A3

Image: Audi A3. Photograph: Kind courtesy, Audi

Luxury car manufacturer, Audi, which was under pressure from a resurgent Mercedes-Benz, managed to keep the lead in 2014.

Audi sold 10,851 units last year, higher than Mercedes-Benz, which sold 10,201 units.

BMW, the third peg in the luxury car market, is yet to announce its sales figures, but market estimates put it at third place.

This is the second consecutive year that Audi clocked sales in excess of 10,000 units, beating 2013’s tally of 10,002 units.

Mercedes-Benz crossed the 10,000-unit-a-year mark for the first time. BMW, trailing in India, however, leads the global pecking order.

Audi A3 Cabriolet

Image: Audi A3 Cabriolet. Photograph: Kind courtesy, Audi

Audi kept the competition at bay by riding high on its latest entry, the A3 sedan, launched in August, 2014.

Starting under Rs 23 lakh (Rs 2.3 million), the four-door, five-seater compact luxury sedan was one of its top-selling models and Audi exhausted its quota of A3 kits that were imported from Germany (and assembled at Aurangabad).

Last year’s festive period of October-November was the best for the Ingolstadt, Germany-based company.

“Audi continues to be the undisputed number one in the luxury car market. . .The strategy we have implemented has helped us to not only achieve leadership but also maintain it,” says Joe King, head, Audi India.

Mercedes-Benz C class

Image: Mercedes-Benz C Class. Photograph: Kind courtesy, Mercedes

Merc’s horsepower

Rival Mercedes-Benz, though, is not far behind.

In fact, the Stuttgart, Germany-based company has posted the best sales growth of the three players.

At 13 per cent, Mercedes-Benz’s growth in 2014 over 2013’s sales of 9,003 units, was better than Audi’s, which was 8 per cent.

Mercedes-Benz has also narrowed the gap with the market leader.

From nearly 1,000 units in 2013, the difference got narrowed down to just 650 units in 2014.

In 2012, Audi had outsold it by as many as 2,163 units.

Mercedes-Benz got on the recovery path (there was a time when it lorded over the market before being overtaken by Audi and BMW at various points in time) with its compact luxury cars.

Its competitors followed suit with similar products, but it held on to its first-mover advantage.

In two years, the company launched three compact models, having multiple variants -- the A Class, B Class and the GLA -- starting under Rs 33 lakh (Rs 3.3 million).

The sales of Mercedes-Benz zoomed after the launches; the compact range accounts for a third of its yearly sales.

Audi A3 Cabriolet interior

Image: Audi A3 Cabriolet interior. Photograph: Kind courtesy, Audi

While the A Class and B Class are hatchbacks, the GLA is a crossover.

Eberhard Kern, MD and CEO, Mercedes-Benz India, says, “In 2014, we witnessed a strong demand growth, leading to a long wait-list on some of the key products, which eventually limited our sales numbers.

“Our aggressive product strategy saw 10 new launches, coupled with our network expansion strategy, which witnessed a record 14 new outlets.

“With this second consecutive successful year, we are now more confident and focused on continuing our growth momentum.”

Audi A4.

Image: Audi A4. Photograph: Kind courtesy, Audi

Audi has to watch its back

Audi’s dominance will be under stress again this year when Mercedes-Benz will launch the CLA sedan in January.

The CLA Class, which is expected to be priced at Rs 25 lakh (Rs 2.5 million), will compete with the Audi A3 and BMW 1 Series, both priced similarly.

King had recently also said that Audi will introduce 10 products this year, including refreshes.

There will be the R8 LMX, TT and A7 and a compact hatchback version of the A3, according to sources.

Audi A3

Image: Audi A3. Photograph: Kind courtesy, Audi

In the luxury car segment, each company has been trying to outdo the other in the last few years.

The energetic scramble to the top is being fed by the robust demand growth.

From under 10,000 units five years ago, the market has grown to almost 40,000 units a year.

However luxury cars still comprise 1.5 per cent of the car market (2.5 million units), much less than the 10 per cent share in China (total market of 16 million units).

But the Indian growth has come despite a subdued passenger car market that grew under 3 per cent.

To spur demand, luxury car companies brought down the entry price-tags by offering compact cars; they also entered new avenues to catch customers early in their purchase life-cycle.

All the three brands are officially present in the after-market segment (second-hand cars), offering a variety of aids such as product guarantee, free servicing and vehicle finance. 

This year, the battle for supremacy is only going to heat up further.

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Swaraj Baggonkar in Mumbai
Source: source

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