No hybrid, our focus remains on petrol and electric: Audi India Head
Balbir Singh Dhillon, Head of Audi India
Audi’s focus will remain on petrol and electric cars in India, and it does not plan to launch plug-in hybrid electric cars in the country, its India head Balbir Singh Dhillon stated on Thursday.
He also mentioned that luxury car sales in India are expected to increase by 8-10 per cent year-on-year (Y-o-Y) in 2024, owing to the high base effect and ongoing supply chain issues. In 2023, the growth was significantly higher at 28 per cent Y-o-Y, with luxury carmakers selling 48,500 units.
Currently, about six per cent of luxury cars sold in India are electric. As customers begin to transition from internal combustion engine (ICE) vehicles to electric cars, the lower Goods and Services Tax (GST) on the latter is aiding their adoption, Dhillon noted. “Till the time we reach 50 per cent penetration in the luxury car space, we would need government support (through lower GST),” he told reporters after launching the Q8 at a starting price of Rs 1.17 crore (ex-showroom).
While petrol and hybrid cars come under the 28 per cent GST slab, electric cars come under the five per cent GST slab. Last month, a senior official of Audi’s rival BMW Group had spoken in favour of incentives for electric cars in India. Jean-Philippe Parain, senior vice-president at the BMW Group for various regions, including Asia-Pacific, had told reporters that strong hybrid or plug-in hybrid cars can be a stepping stone towards India’s aim to reduce carbon emissions, but the country’s focus should remain on electric vehicles (EVs) with regard to low taxes and incentives.
Dhillon on Thursday explained the company’s strategy on this issue. “We gave up selling diesel cars in India in 2020. We are completely focused on electric cars and petrol cars. Since the volumes in the luxury car space are limited, it is important that our focus is very clear because any car that we introduce, we have to service it for 10-15 years. For that, we need infrastructure that can provide components at the right time and provide manpower across dealerships that are fully trained. Everything comes at a cost, and we need to maintain it. So, for us, the path is clear—it is first petrol and then electric,” he stated.
“In our global portfolio, we do have plug-in hybrid cars. But at this point in time, the decision is very clear that we have to focus on petrol and electric cars,” he stated. When asked if Audi is planning to bring any plug-in hybrids to India, he replied in the negative.
Audi India sold 7,027 units in 2023-24, recording a 33 per cent year-on-year growth. In 2022-23, Audi India had sold 5,275 units. However, the company is facing challenges due to supply chain issues. In the first quarter of 2024-25, the German carmaker sold 1,431 units, which is six per cent less year-on-year.
The share of electric cars in Audi’s total car sales in India is currently about 3 per cent. “It is definitely not enough… We intend to go close to 40-50 per cent by 2030. This might happen whenever we decide to make these cars in India, as it will lower their prices,” he said.
Audi’s electric cars are currently priced at Rs 1.2 crore and above, and there is a huge segment in the Rs 50 lakh to Rs 1.2 crore bracket where the company would like to establish its electric presence, he noted. He said the government also incentivises electric cars because it helps the country reduce its sizable fuel import bill.
As India aims to be carbon neutral by 2070, automakers are divided over the best path forward. Japanese mass-market players like Maruti Suzuki, Toyota, and Honda are pushing for tax cuts on hybrids, arguing that EVs alone cannot bear the entire burden of reducing emissions. However, carmakers like Tata Motors, Hyundai, Kia, and Mahindra & Mahindra insist that only a full commitment to EVs can truly decarbonise India’s roads.
First Published: Aug 22 2024 | 5:34 PM IST