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Audi considers manufacturing luxury cars in India

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Audi is considering manufacturing certain models of its luxury cars in India. At present, the company only assembles cars there.

According to the Economic Times, Audi recently completed a study into the viability of manufacturing cars at the plant of parent company Volkswagen in Chakan, Maharashtra.

Sources from Audi told ET that the models being considered are the yet-to-be-launched A3 compact vehicles and the Q3 compact sports utility vehicles. The decision is likely to be made within six months or a year.

According to Audi India Head Micheal Perschke, the viability of this idea depends on whether the company could deliver sales of 10,000 units per annum. At present, this would not be viable, but the company is looking at various business models for the next five to 10 years.

Experts say that there are only 30,000 to 33,000 luxury cars sold per year in India. Therefore, manufacturing such vehicles in that country is not currently viable. 

It would only be viable if India were to become a key manufacturing hub for a specific model. That model could then be exported to justify volumes or share common platforms of other cars.

Meanwhile, The Wall Street Journal reports that Renault and Nissan are planning to begin jointly manufacturing automobile engines in India next year.

The engines would be used for Nissan's coming Datsun low-cost car and a small vehicle that Renault plans to sell in emerging markets such as India.

The two companies have cross-ownership stakes and share a chief executive. They both want to increase production in India because of the growing demand for cheap small cars in that country.

Image: Economic Times

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