Q&A with Balbir Singh Dhillon, Head of Audi India
COVID-19 has delivered a body blow to the automotive industry and more so to the luxury car market that could face a fall in demand because of possible austerity measures by potential customers. However, India's third largest luxury carmaker Audi believes that digital outreach and absence of options like a luxury holiday will reroute buyers to the luxury car industry.
Moneycontrol interacted with Balbir Singh Dhillon, Head of Audi India to understand its strategies amid the disruption. Edited excerpt
Has COVID-19 impacted any of your plans for India? Will you alter, postpone any of the planned initiatives like launches or investments?
At Audi India, our existing plans remain intact; we have a clear roadmap in place and we have termed it ‘Strategy 2025'.
This strategy includes four key focus pillars for the brand, Customer centricity, digitalisation, products, network. On the product front, our launch plans include a mix of volume and performance models in the near future. We had to make certain short-term adjustments to our upcoming launches; however, we have not cancelled any product that was to be launched in India because of COVID-19.
What is the real disruption to business caused by COVID-19 pandemic?
Like many others the luxury car industry has also been impacted due to the lockdown. Strict lockdown rules have had an undesirable impact on the automotive businesses. While most of our showrooms and workshops are now open the impact of the pandemic has been felt severely on the overall business. We have devised newer ways like interacting with all stakeholders via digital mediums, managing teams online, and making business decisions from our home offices is the new way of working.
This situation has also forced businesses to have short contingency plans without which the core of a business can be impacted during a lockdown.
How is Audi hit economically because of the shutdown? What has been the loss in sales due to the shutdown and is there any hope of recovering that?
While we don’t share numbers specific to a quarter or a month; first quarter of 2020 saw over 30 percent de-growth in luxury cars sales. This quarter will be probably be worse, given the lockdown period. We have begun receiving test drives requests and potential customers are spending time on the website, configuring / customising their cars. We also have customer visiting our showrooms. On the after-sales side, service related requests have picked up very well, as most of our customers prepare to resume their daily lives. We are staying positive and hopeful of demand revival as we approach the festive season.
Are you expecting any change in the buying behaviour of your customer post-COVID-19?
There will be a shift towards more digital research. People are generally becoming more comfortable with the concept of work from home and this will trickle down to other aspects of life. We are well equipped to cater to this buyer with our customer centric augmented reality and virtual reality initiatives. We have a strong hold on digitalisation and are investing heavily as we move forward. Luxury car buying is a very emotional purchase decision, therefore, a phygital pre-buying experience is what we expect our customers will be inclined towards. A large chunk of our buyers are from the business community, whose first priority will be to stabilize their own businesses. On the other hand, there will also be a set of customers who will make that splurge to reward oneself.
Audi had promised to launch its first electric car in India this year. Are we on schedule? Has there been any changes to its launch timelines?
We were the first luxury car brand to reveal an electric car in India (in 2019) and are excited about the prospects of the Audi e-tron. The launch is on the cards and we will announce the timeline of the same in due course.
Does the disruption give you a chance to go fully digital in your sales approach?
We believe that digitalisation plays a major role in buying and engaging with a customer and we are confident that our digitalisation initiatives will help tap into demand from tech-savvy buyers. At the same time, it is important to note that the luxury car space operates in a slightly more complex manner given the price factor. We believe that digital will not completely replace physical. We believe that the way forward is ‘Phygital’, where digital showrooms and experiences will enhance the physical buying process.
How long before you customers start buying again?
The COVID-19 pandemic has taken a toll on the economy and has altered buying patterns. While things will take some time to return to normal; we are expecting demand to pick–up during the upcoming festive season. We are happy to report that we are already seeing customers visit our showrooms. We have had over 15,000 interactions on the website for our AR feature.
Where do you see sales of luxury cars end in 2020, not just for Audi but for the industry?Realistically, the luxury car segment will remain muted for some time before growth begins. Optimistically, we could see some spurt of demand due to the changing buying behaviour with a focus on personal mobility. In the absence of other avenues to splurge on like luxury holidays etc., consumers may look buying a luxury car. We expect revival for the overall luxury car industry starting 2021.