Supply disruptions to hit production and deliveries in 2024: Audi India

German automaker struggles to meet customer expectations despite strong demand

Audi India has forecast a decline in sales for the remaining months of 2024, citing persistent global supply chain disruptions that continue to impair production and deliveries. Despite robust demand for luxury vehicles, the German automaker faces challenges in meeting customer expectations due to these bottlenecks.

 

“Most of our supply constraints occurred in the first half of this year, from January to June. The situation improved in the third quarter, and we are now seeing normal supply levels. However, due to these earlier constraints, we unfortunately won’t be able to achieve our growth targets for this year and will see a decline in overall sales,” said Balbir Singh Dhillon, head of Audi India.

 

 

The primary reasons for these supply chain issues are twofold: global disruptions in component sourcing from various locations and delays in shipping. While semiconductor shortages, a major issue after the pandemic, have largely been resolved, Dhillon observed, “The current challenges are more related to geopolitical factors, where disruptions in any part of the global supply chain can halt production, even if it’s just a single missing component."

 

In the first nine months of 2024, Audi India sold 3,889 units, a 29.6 per cent decline compared to the same period last year. Meanwhile, Audi Approved :plus, the pre-owned car business, grew by 29 per cent year-on-year (Y-o-Y). In 2023, the company registered an 89 per cent growth, selling 7,931 units, while the pre-owned business saw a 62 per cent Y-o-Y increase.

 

Despite 2024 potentially being one of the best years for the segment overall, the industry is expected to sell only about 50,000 cars across all brands.

 

For Audi India, this year marked a milestone, with the company selling 100,000 cars in the country. The Q7 model has been a key contributor, accounting for 10 per cent of total sales with 10,000 units sold. Maintaining this level of contribution from the Q7 remains a priority for the company moving forward.

 

However, Audi India remains optimistic about the long-term potential of the Indian market. The company highlighted a 12 per cent increase in women car buyers, up from less than half a per cent a few years ago. This growth has been driven by greater financial independence and changing household car ownership dynamics.

 

Audi is also preparing for electric vehicle (EV) expansion by developing local infrastructure, including 145 charging stations across 70 cities and 12 specialised workshops. EV sales are currently at 2-3 per cent, constrained by high import duties (70-110 per cent) and limited affordability. The long-term electrification strategy includes evaluating models for local assembly to ensure sustainability.

 

Audi India currently operates 29 new car showrooms, 26 pre-owned car outlets, and 41 workshops across the country. The company plans to expand further, adding five to seven locations in the coming years, both in existing and new cities. This expansion strategy aims to enhance customer accessibility and convenience.

 

The pre-owned car business has seen sizeable growth, expanding from seven outlets in 2020 to 26 today. This segment is considered just as important as the new car business. By offering certified pre-owned cars with warranties and rigorous quality checks, Audi aims to establish a strong presence in the organised pre-owned car market.

 

In a bid to bolster its premium sport utility vehicle (SUV) offerings, Audi has launched the new Q7 SUV, starting at Rs 88.66 lakh (ex-showroom). This luxurious facelift features a powerful 3.0L V6 engine, advanced driver assistance systems, and a sleek new design.