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BW Businessworld

Audi In Damage Control Mode In India

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The event was a super car rally in Mumbai on the Rajiv Gandhi Bandra-Worli Sea Link on Sunday, January 27, where owners of Aston Martin, Porsche, BMW, Audi and Lamborghini —all luxury cars — were participating.

In the midst of the rally, a Rs 1.8-crore Audi R8 caught fire and was reduced to ashes by the time the damage was brought under control. Audi India head, Michael Perschke, claimed that the fire was due to modifications which had been made in the car. The owner, Bhavesh Thakkar, a Mumbai-based businessman denied having made any alterations to the car.

“Investigations are on as to the cause, we will know more as they progress,” says an Audi spokesperson, refusing to further elucidate the reason for the accident.

Perschke himself tweeted about the accident saying “the car was not an official entry into the Super Car Club weekend and initial reports indicate that the car had been modified. However, we will investigate the matter further to understand the possible reasons for the incident.”

While not a big enough incident in itself, the news comes at a time when Audi is making serious strides, taking on close competitors BMW and Mercedes in the premium car space. Following the incident, at least three dealers that Businessworld spoke to said that there have been cancellations.

“Many customers have expressed concern about the R8, especially given the fact that a similar incident happened in Spain as well. We have had one cancellation this week,” says a Delhi based dealer.

According to data from the Society of Indian Automobile Manufacurers (SIAM), Audi sold 6,901 units between April and December, an increase of over 60 per cent vis-à-vis the same period last year. This meant that Audi came that close to overtaking BMW as the market leader in the premium car space, having already overtaken Mercedes Benz. SIAM data showed
between April and December 2012, sale of BMW and Mercedes cars stood at 6,129 and 5,006 respectively. This is a decline of 15.16 and 5.35 per cent, respectively, for the German car makers.

“Whether the incident will have an impact on the larger sales will depend on the outcome of how the company explains the mishap. Indian customers may accept such incidents in a Nano, but the Audi R8 buyer expects a premium product and this is bound to have an impact on the overall brand perception,” says Suhel Seth, Managing Partner, Counselage, a brand management consultancy.

Audi is in the process of expanding its dealer network from the current 25 to over 34 by the end of 2013. The German car maker sells the Audi A4, Audi A6, Audi A7 Sportback, Audi A8L, Audi Q3, new Audi Q5, Audi Q7, Audi S4, Audi RS5 Coupé, Audi TT Coupé, the super sports car new Audi R8 and the Audi R8 Spyder in India at present.