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Audi plans dealership grid in India, rules out production base

Byas Anand in Frankfurt

German luxury car-maker Audi AG plans to initiate efforts to put in place an exclusive, completely built vehicle importer and dealer network in India.

The company would shortly get in touch with prospective investors in India interested in the Audi brand.

''We are looking at setting up an exhaustive dealer and after-sales service network in India. And we are inviting Indian private parties to partcipate in this exercise with us,'' Jurgen de Graeve, global spokesman for Audi AG, said on the sidelines of the Frankfurt Motor Show.

Despite having deciced not to invest in setting up a production base in India, Audi views the country as a potential market. And this has prompted it to increase awareness about its brands in the country through direct imports of completely built units of its A4 and A6 cars.

As part of this exercise, the company intends to have in place about six dealers spread across the metros. It presently has only one dealer in Bombay. The exercise is expected to commence in 2000. ''Presently, we are utilising all our efforts and resources for the Japanese market. Probably next year, we will start afresh for India.''

Audi, however, would not pick up stake in the dealerships. ''It is against our policy. We let the dealerships remain independent of Audi. The private investor that he is, the dealer understands the market better than us and would be in a better position to do justice to the business. We would give them all technical support and to some extent even financial and marketing assistance, but we will not pick up equity in these ventures,'' de Graeve added.

These efforts have been initiated with an eye on expanding the market for Audi cars in India to over 100 cars a year.

Audi had, a few years back, initiated a feasibility study and announced plans to set up a joint manufacturing facility with its group company Skoda Auto. Under its original plan, the company had proposed to produce the A4 model in India.

Under the present Indian automobile policy, car-makers are required to invest a minimum of $ 50 million in India, besides achieving a local content level of 50 per cent in three years and 70 per cent in five years.

Audi was opposed to the indigenisation programme and had sought additional time for achieving the said levels. However, the government refused the relaxation which forced the company to pull down curtains on the venture.

Meanwhile, Skoda Auto's plans to set up a production base has also hit a rough patch and the company is still awaiting government relaxations on the indigenisation front. The company plans to produce the Felicia and Octavia models in India.

In the first phase, Audi was to manufacture around 5,000 to 6,000 cars, while Skoda was looking at making 60,000 cars per annum.

Skoda officials had stated that the Czech car-maker has adopted a ''cautious'' approach towards the Indian market. The company is also said to have scaled down its investment plans for India from the earlier Rs 10 billion to a mere R 1 billion now.

Skoda's initial plans were to roll out the Felicia model both as a car and as a pick-up van. The Octavia, a mid-size saloon which was launched in Europe recently, is also in the wings. The Felicia will be available in both petrol and diesel versions in India.

Audi is part of the Volkswagen group, which includes other companies like Skoda and Seat.

UNI

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