Audi India moving towards petrol

The company recently launched their flagship SUV – Audi Q8

The buzz in the auto industry, apart from the slowdown, is the switch from the current Bharat Stage-IV to the cleaner BS-VI emission norms from April 1 this year. Moreover, there is also talk of electric vehicles, which we will have to eventually move to.

Audi India recently launched their flagship SUV – the Q8 – in Mumbai. The fact that the German luxury carmaker has brought in a petrol SUV says a lot about what we could expect from the industry in the future. Quite clearly, we are moving away from diesel as the nation looks to more environment-friendly mobility options. This is more so as we embrace the BS-VI emission norms.

“We are also moving towards petrol and there are headwinds that we face. Every manufacturer is switching from BS-IV to BS-VI and it is not possible to change all cars one day and everything is the same. With this change, we are also taking the very bold step of not keeping any of our existing cars the same and just change the engine. It will either be a completely new car like the Q8 or a new generation model like the A6. It could be a mid-life cycle improvement,” said Audi India Head Balbir Singh Dhillon.

“Diesel now is about 65 to 70% but we recently launched the A6, which is only petrol. The response to the car has been good. We lose some diesel customers, but other first-time customers have come to us. We also have a strategy to retain customers who only want diesel cars with certain programmes," he said.

“Personally, I too felt that SUV is always about diesel. There was never a thought that an SUV can sell in petrol. But my perception has changed. Petrol has changed from 5% to 30%. That itself is a big change. We are selling 50% SUVs and 50% sedans. It is a spread and I think we will able to manage this successfully,” he added.

So, does it mean that Audi India will totally go the petrol way? “The answer is no. For the short term, we want to go with petrol and electrification and keep diesel in abeyance,” Dhillon clarified.

“When we came up with ‘Strategy 2025’, we did not just look at one, two or three years. We looked at five to six years and the future as well. On the luxury side, all the manufacturers, especially in Europe, are investing heavily on electrification. It started when government regulations became stricter and stricter. The norms are becoming difficult and there is no choice but to move towards electrification,” he said.

“Investments on internal combustion engines are coming down. Keeping that in mind, there will be massive electrification in the coming years. So, we have taken the bold step to move towards petrol,” he stated.

The Q8 is a mild hybrid SUV and many cars have this technology. But Dhillon feels that the more superior plug-in hybrids may not really work at this point in time due to the high cost. “Plug-in hybrid is just one step below the electric car, but it is expensive. If I have the Q8 and a plug-in hybrid of this car, you would have to pay about 20-25% more. The question is are you willing to pay more? The answer would be no unless there are volumes. But we will switch to electric for sure because that is the way to go,” he explained, while adding that Audi could roll out an electric this year.

Currently, the luxury, super luxury and EVs attract massive duties, especially the completely built unit imports. Asked what Audi expects from the government, Dhillon said, “Our humble request to the government is to have a relook at the duty structure. The GST which is still high. It is not just 28% that is high for the whole industry. We also have 22% cess, then import duties, then registration tax that ranges between 10 and 20% across the country. We are paying duties on duties on duties. The government gets revenue, which it should. But if they give a bit of flexibility, then we can have volume sales and the government can get even more revenue.”