Lunch with BS: Joe King

In India, for a world view

When in March last year, his bosses at Audi asked whether he would like to lead the team in India, Joe King, 44, was excited for two reasons: one, India was like several countries rolled into one and having spent four years setting up Audi's largest dealership in the southern hemisphere in Sydney, he was looking for a more challenging assignment; and two, he thought his first professional stint outside Australia would help his two sons aged 14 and 11 get a "world view".

So a month after the discussions, the Kings booked a flight to India to house-hunt and get their children admitted to the American School in Mumbai. The family returned in September when King took charge of Audi India. "Getting to know life outside your immediate comfort zone is important - as much for me as my sons at this stage of their life", King says as we settle down at Bottichino, the Italian restaurant at The Trident in Mumbai's Bandra Kurla Complex.

So why did he take such a long time to get this world view, we ask. The answer is bluntly honest: "It's because I didn't get such an opportunity earlier." His wife, though, had that view much earlier in life since her parents worked for quite some time in Fiji Islands and some of the family conversation at dinner time still revolves around her fond memories of Fiji.

The four months in India have taught King many things, one of them being how incredibly diverse a country can be and the sheer passion and optimism people can have despite the challenges. He proceeds to give two examples of the latter. He remembers how his car was crawling on a main thoroughfare in Bandra just because over a hundred people were watching an Indian Premier League match being telecast in an electronics goods showroom. That's not something he would ever imagine in his home country.

The second example is from his first day's experience outside the hotel at which he was staying. During their morning walk, an elderly gentleman walked up to them and struck up an interesting conversation. "It was a revelation for me because in my home country, people would avoid catching your eye as they are too busy with their own lives," King says.

Settling down in Mumbai has been far easier than he had thought since the city had several things in common with Sydney: the traffic congestion, humid weather and love for cricket.

We notice the small badge with four interlinked rings - the Audi emblem - that he is wearing on his blazer lapel, and King says he wears it 24x7 even when he is dressed less formally since it's a manifestation of the passion that all Audi employees should have. The CEO is quick to realise that his colleague, who has also joined us for lunch, is not wearing one and takes great pains to explain that it's not a mandatory exercise. His high-intensity passion for Audi hasn't come because of any long association with the company - in fact, King, educated in the University of Melbourne, is far from being a one-company man. Before joining Audi in 2009, he spent 13 years with BMW and before that six years in Toyota, the world's biggest automaker.

We steer the conversation to his current employer Audi India, which is on a roll, becoming the largest luxury car maker in India last year by unseating BMW, and the first luxury car company to report annual sales of over 10,000 units. Interestingly, India is the first market in Asia after China to claim the number one spot, and more than 90 per cent of the cars sold in India were built locally at its Aurangabad plant. The India growth story, largely the contribution of his predecessor Michael Perschke, indeed surprised the Audi bosses in Ingolstadt, the headquarters of the company, since they didn't expect Audi to dethrone BMW before 2015. King takes a big spoonful of the piping hot pumpkin soup and says his job has indeed been made easier by his predecessors.

So his drive would be to take the process forward by bringing the brand closer to the doorsteps of customers, specially those in smaller towns, where swanky luxury cars are no longer a rare sight. Audi invested 50 per cent more in after-sales service last year and plans to do the same this year. Besides, the company plans to increase its network to 40 dealerships by the end of this year from 31 now.

One of the key differentiators, King says, has been Audi's marketing strength and customer engagement initiatives through the creation of driving experience programmes such as Audi QDrive, Women's Power Drive, and Ice driving, among others. "The local connect is something that helps immensely in sustaining brand loyalty," King says. And the opportunity in India is great, considering that India saw sales of less than 50,000 luxury cars last year compared to 1.25 million in China.

Moreover, he has figured out that India is a country where global trends are quickly adopted and there is a latent hunger for luxury. Also, the Indian customer is value-sensitive, not price-sensitive, whatever people (read the competition) might say. As an example, he talks about the growing number of younger customers who are willing to pay a higher price if they see value by way of additional features, performance and so on. He gives several examples of Audi Q3 and Q4 customers who have jumped price bands to buy a higher-priced car.

Admitting that the Indian market is not growing much at this point, which is understandable before elections, Audi's strategy, he says, would be to maintain its market share and grow by bringing in the right products to the market. The focus will, however, not be on market share alone, but a profitable business model. "We are not in the business of hunting for the top spot recklessly," he says.

As the chicken Ravioli is served, we ask whether he feels threatened by the fact that Audi is facing stiff competition from its German peer, Mercedes-Benz, for market leadership in India. After all, although Audi ended 2013 with an 11 per cent growth in sales (compared to seven per cent for the luxury car industry as a whole), sales petered out substantially in the second half. And in the final tally, Audi's sales were just 1,000 units ahead of Mercedes, which posted a whopping 32 per cent growth thanks to its products in the "affordable compact luxury segment" through its A and B Class. The GLA and CLA Class will be launched, one of them this year.

King is unruffled and says he prefers to look at Audi's internal strategy rather than what others are doing. Audi, he says, has consciously stayed away from the strategy of introducing cheaper products. For example, the Q3 was introduced at a higher price than competition, but with more features and got an overwhelming response. "We think sedans are more popular in India in the luxury segment and that is why we are going to focus on it," he says.

He is pinning a lot of hope on the Audi A3, which will be launched in India in the middle of this year and sees the sedan as a likely game-changer for Audi India since it has the potential to be the largest selling luxury car in the country. The A3 would fit between the compact luxury hatchback and the entry luxury sedan segment.

King prefers to skip dessert but wants to talk more to drive home his point. "There are lots of things you can't control, like what your competitors do. Plus, It's not about who sold more cars," King says, with a straight face, adding that Audi has over 3.2 million Facebook fans, which shows it has a strong connect with the customer. The number, King says, is the second biggest for Audi in the world after the US.

So what else does he do apart from his professional obligations? King now looks relaxed and says he enjoys playing golf. More than networking, he believes golf is a sport where the challenge is to you. "I am intrigued at the power of the mind to enable you to pay brilliantly some times, but appallingly at other times," he adds. In many ways, that could be a summary of the journey of India's super-luxury car market so far.