Audi India targets doubling India luxury-car share in three years

Audi India plans to double its share of the country’s luxury-car market from around 8 per cent over the next three years.

 

This comes as the German carmaker seeks to revive sales through product expansion, spanning entry-luxury models and a new flagship sports utility vehicle (SUV), alongside network growth and sharper focus on customer retention.

 

The carmaker will launch the new-generation Q3 compact SUV in the fourth quarter of calendar 2026, followed by the A5 sedan in the first half of 2027 and the Q9 full-size flagship SUV in the second half.

 

The Q3 and A5 will be locally assembled, while the Q9 will initially enter India as a completely built unit (CBU). Audi is also evaluating local assembly of the Q9.  

 

“We want to double our market share, which is currently at about 8 per cent in the luxury space, in the next three years, step by step,” Audi India brand director Balbir Singh Dhillon told Business Standard.

 

The turnaround plan follows two years of declining sales. Audi’s India retail sales fell 26.6 per cent to 5,816 units in 2024 from 7,931 units in 2023 and another 22.5 per cent to 4,510 units in 2025. This is an overall decline of around 43 per cent in two years.

 

Audi expects sales to remain broadly flat in 2026 before returning to growth in 2027 as the new models begin contributing.

 

The Q3 and A5 will renew Audi’s offerings at the entry end of the luxury market. The A5 will succeed the A4 and be positioned somewhat higher in size and price.

 

“Our entry point for customers is either the Q3 or the A4, and we have sold almost equal numbers of both models in India. We are trying to address first-time luxury buyers through the A5 and Q3,” Dhillon added.

 

The Q3, historically one of Audi’s highest-selling models in India, will arrive during the festival season. The Q3 and A5 are expected to be its principal volume drivers.

 

At the other end, the six- or seven-seater Q9 will take Audi into the full-size luxury-SUV segment above the Q7. The Q9 would be competing with models such as the Mercedes-Benz GLS and BMW X7.

 

Audi has sold more than 10,000 Q7s in India and a similar number of A6 sedans, giving it an existing customer pool for the Q9.

 

“We did not have an option above the Q7 for these customers. The Q9 will offer the next level of luxury and internal comfort,” Dhillon said.

 

Audi evaluates making Q9 in India 

While the Q9 will initially be imported, Audi is “very seriously” evaluating local assembly to lower its price and widen the addressable market.

 

The Q9 is manufactured globally at the Volkswagen Group plant in Bratislava, Slovakia.

 

Audi has not set a timeline for Indian assembly or disclosed the volumes required to justify the investment. “Even if the volumes are a little lower, it may make sense to make the car in India so that we can offer it to a wider set of customers,” Dhillon said.

 

An imported internal combustion engine (ICE) vehicle priced above $40,000 attracts Customs duty of 110 per cent, besides 40 per cent goods and services tax (GST) and registration charges, he said.

 

Audi expects clarity on the localisation proposal over the next few months. Locally-manufactured vehicles already account for more than 90 per cent of its India sales, a ratio it intends to maintain.

 

The proposed India–European Union (EU) free trade agreement (FTA) could allow Audi to import more models at lower duties, but would remain complementary to its localisation-led strategy.

 

“The FTA may open up more opportunities, but the fine print is not yet in public domain. It will not change our business model,” Dhillon said.

 

Audi will continue to focus on petrol vehicles and battery-electric mobility. It currently has no electric car on sale after exhausting its allocation of imported electric vehicles (EVs).

 

The company is discussing its next EV plan with headquarters, including a locally assembled model at a lower price point. Its earlier imported EVs cost more than ₹1 crore because of high duties, limiting its addressable market, Dhillon said.

 

Supply constraints, ageing models hit sales 

Dhillon attributed the decline since 2023 to supply-chain constraints, ageing products and gaps created as models reached the end of their life cycles.

 

“Some of our products have been towards the end of their life cycle. Eventually, there is no more supply of those cars,” he said.

 

Foreign-exchange movements also forced price increases. According to Dhillon, the rupee depreciated against the euro by around 3–4 per cent in 2024, 19 per cent in 2025 and another 7 per cent so far in 2026.

 

“This is leading us to pass on some percentage of the increase to customers,” he said, adding that rising prices were particularly affecting entry-luxury demand.

 

Audi will expand its new-car network from 29 showrooms to around 40 by the end of 2027 and upgrade existing outlets to its global Progressive Showroom Concept. It is also training around 2,500 sales and after-sales employees to handle vehicles with higher software and digital content.

 

Used-car business becomes customer funnel 

Audi sold around 4,500 pre-owned luxury vehicles through Audi Approved:Plus in 2025, broadly matching its new-car sales for the first time. The network, which retails Audi and other luxury brands, has expanded from seven outlets in 2020 to 27, with cumulative sales of around 20,000 vehicles.

 

As new-car prices rise, the pre-owned business allows Audi to address the ₹30-60 lakh segment and potentially move these customers into new cars later.

 

“We are going to tap these customers and see how many we can convert into new-car buyers,” Dhillon said. “The pre-owned business addresses a segment that we are being forced to vacate as new-car prices increase.”

 

Customer retention has also improved, with one in every three new Audis now sold to an existing customer.

 

Road Ahead

 

-- Q3, A5 to target first-time luxury buyers; Q9 to enter top-end segment 

-- Evaluates local assembly of flagship SUV; network to expand to 40 outlets