Michael Perschke, Head, Audi India: In conversation with Raghav Sarma

In this year end exclusive on the Licence to Drive platform, we bring you a Q&A session with Audi India’s top boss Michael Perschke. Brand Audi has had a phenomenal run in India under him so far, positioning itself as the vehicle of choice for an emerging set of young, successful & nouveau riche Indians with ever expanding desires. It’s sporty, edgy and tech-driven aggression has been well harnessed and seems to have connected well with the rising aspirations of the fast & the furious.

Michael’s mission is to make Audi the top selling luxury brand in India by 2015. Having worked with BMW and Mercedes earlier (he was a Benz employee in India during it’s early days), he is perhaps best suited to lead mission (im)possible. Personally, I think he is also the best ambassador that the brand could possibly have – young, sporty, successful & suave, with a admirable sense of personal style.

December 2012/ In conversation with Raghav Sarma:

Raghav: Thank you very much for taking time out of your extremely busy schedule and joining us for a Q&A session on the Licence to Drive platform. It is such a pleasure to welcome you. Firstly, congratulations on the fantastic run that Audi India has had so far. Commendable for a brand which was relatively unknown as compared to competitors at the time of launch in 2007. What would you attribute this success to?

Michael Perschke: At the time of launch, not too many people in India were aware about Audi and its heritage. We have carefully built our image in the market ever since. Being a progressive brand, Audi’s marketing strategy too is progressive, and in line with the ever-changing market dynamics. At Audi, we have 4 pillars of growth:

1. Expansion of product portfolio and service offering – with 5 product launches this year (Audi TT, New Audi A4, Audi S4, Audi Q3, and Audi A8L 4.2 TDI) we now have a total of 12 Audi models in our product portfolio for India.
2. Expansion of our dealer network – with the recent opening of the Audi Raipur showroom, we now have 23 dealerships across the country. We plan to take this number to 25 by the end of this year.
3. Progressive and engaging marketing communication activities – creating a ‘pull’ for the brand rather than a ‘push’. Expanding our horizon and venturing into new areas with music video, strong brand channels, booking parties at our showrooms and big-scale customer drive events.
4. Infusing skilled talent across corporate, dealership and production teams – we strongly believe that a competent workforce that exhibits and fosters Audi’s brand values of progressive, sporty and sophistication, is one of the major contributors to profitable growth and will soon help us achieve the leadership position in the luxury car segment in India.

Raghav: As the youngest luxury auto brand, do you think it is also good timing combined with a clever brand communication strategy aimed at the young, successful and affluent consumers that has contributed to its success here?

Michael Perschke: A series of pioneering marketing initiatives have helped us establish a strong brand connect and reach out to a wider base of customers. We at Audi believe in offering a luxurious and sporty experience to our customers and prospects in India. The Audi Driving experience, Davos is an opportunity to interact with winners and offer them to experience the luxury and technology of an Audi. The Audi Sports Car Experience is an opportunity for our customers and prospects to drive the Audi R8 on Buddh International Circuit in Greater Noida & Madras Motorsport Race Track in Chennai. The Audi Q-Drive is a one of its kind program which gives our customers and prospects a chance to experience and test drive the sporty and sophisticated Audi SUV range – Audi Q7, Audi Q5 and the Audi Q3. Then there was the Audi R-Drive; a unique initiative which gave our customers and prospects a chance to experience the award winning Audi R8 V10 Spyder and the Audi RS5 on the roads of their own city. Along with these high end super sports cars, we provided the services of three of India’s prominent rally drivers to ensure that our customers got a truly world class experience. Audi has a deep heritage connection with Le Mans Race held every year in France and this is also where we invite our customers to watch the endurance race. The Audi quattro Cup and Audi Vintage Car Rally among others are some of the many ways we reach our customers who can identify and relate to our brand values. As you can see, these experiences create a strong connect with our brand enthusiasts.

Raghav: Audi has now overtaken Mercedes to become the No. 2 luxury car brand in India. A remarkable achievement in just 5 years, considering that Mercedes has been here for close to two decades. What’s the plan for the next big leap to achieve the coveted No.1 position? 

Michael Perschke: We aim to be the No. 1 luxury car brand in India by 2015. We might achieve this a little earlier also, by 2014. Our 4 pillars of growth have held us in good stead and we intend to further use this as a benchmark; of course, with a few variable changes with respect to market dynamics.

Raghav: In a recent interview with me, Peter T. Honegg of Mercedes Benz India mentioned that true luxury in automobiles in India actually starts at the Rs. 30 lac + price bracket. Anything below that does not really deliver luxury and is at best a bridge category. Would you agree?

Michael Perschke: With the wealth of Indian nouveau riche and the ever expanding desires that come with increased riches, Audi is fast becoming the desired mode of transport for them. According to a Kotak-Crisil survey, the total net worth of India’s Ultra High Net Worth Households (ultra HNHs) will reach Rs. 318 trillion in 2016-17, a nearly five-fold increase from around Rs 65 trillion in 2011-12. This survey has also touted Audi as a brand that is scoring over competition in terms of newer models and exclusivity in terms of design, value-added features and services. In fact, Audi is quickly becoming popular amongst the younger ultra HNIs.

Raghav: Audi’s global sales in August grew by 15%, and Indian sales by a much higher 42%. However the luxury automobile segment is showing some signs of stress at the moment. Do you remain optimistic for the rest of the year?

Michael Perschke: Rising fuel prices, depreciating rupee, changing registration taxes in various states, reduction in retail loans and speculation on higher duty on diesel cars, together have a negative impact on the automobile industry. In spite of these challenges we are confident about our growth in India. In fact, we have registered a total sale of 850 units in October this year, a strong growth of 76 percent over the same period last year (October 2011: 482 units). We have recorded a 55 percent growth rate YTD with 7267 vehicles sold from January to October 2012. (Jan-October 2011: 4692 units). We are well on our way to surpassing our sales target of 8000 cars by 2012.

Raghav: Mercedes recently launched the B-Class hatchback in India, and BMW is gearing up to launch the 1 Series. When do we see the Audi A1 in India?

Michael Perschke: We evaluate the market viability before bringing a global product to the local market. As a global brand we believe that everyone should have the same chance to experience global products. As of now, we do not have any plans to bring the Audi A1 to India.

Raghav: At the 2012 Delhi Auto Expo, Audi showcased the A3 e-tron hybrid sedan concept. Could you share the progress made on that project? 

Michael Perschke: The Audi A3 e-tron concept is designed as an efficient, parallel plug-in hybrid. Its 1.4 TFSI engine produces 155 kW (211 hp), the electric motor 20 kW. Both units drive the front wheels. With its capacity of 12 kWh, the lithium-ion battery provides enough energy for a range of roughly 50 kilometers (31 miles). The Audi A3 will go into production as a plug-in hybrid in 2014, with the Q7 and A4 to follow a short time later.

Raghav: Audi’s performance division, the RS or R is extremely successful across the globe. But we have only a few of these cars in India. Will Audi be bringing the S6, S8 or the RS6 Avant to India?

Michael Perschke: We are assessing the potential of new product launches in India.

Raghav: The Audi driving experience program at BIC has seen considerable success. Is there any chance of Audi starting a racing series in India, on the lines of the Polo Cup by Volkswagen?

Michael Perschke: As of now we only have the Audi sportscar experience (ASE) in India. After the stupendous success of ASE basic, we are going to launch the advanced version of the program soon. This program will give enthusiasts a change to participate in international driving experience as well.

Raghav: Audi is extremely proactive in reaching out and engaging potential customers through active branding in mass sports, entertainment and lifestyle events. Is that a strategy to engage the next gen early? Or just a way to enhance and sustain brand visibility.

Michael Perschke: Younger customers are the game changers in the segment, who want to make a statement about their individuality. And creating customer experience through Audi Driving Experience, Audi Sports Car Experience, Women’s Power Drive, R- Drive among others have proved to be beneficial. A series of pioneering marketing initiatives have created a strong connect with our brand enthusiasts and we look forward to have many more interesting conversations with our customers with the addition of special Audi Q3 website and Youtube channel. Our customer engagement exercise at the Auto Expo 2012 also encouraged them to connect directly with the brand. We have extensive involvement/ engagement on Facebook, Twitter, Youtube and Pinterest. In fact we are the only luxury automobile brand in India on Pinterest. We are the 2nd largest Audi community worldwide on Facebook after Audi USA. If you visit our Facebook page, you will see it is very engaging and interactive. We have about 14,15,895 fans and around 77,973 engagements. We have a huge community of young and vibrant followers on FB and Twitter who contribute to positive word of mouth. On Twitter, we have about 4688 followers and engagement with our customers on such platforms leads to brand visibility.

Raghav: Audi has been extremely successful in championships like the FIA World Endurance Championship and Le Mans, but has never ventured into Formula One; unlike Mercedes-Benz and BMW. That’s quite intriguing.

Michael Perschke: We participate in the 24 hours of Le Mans which is a motor sport phenomenon. Race teams have to balance speed against the cars’ ability to run for 24 hours without sustaining mechanical damage. The cars have to run for 24 hours and the drivers frequently spend stints of over two hours behind the wheel before stopping in the pits. This year was historic for Audi. On the 80th running of the famous Le Mans 24 Hours, a vehicle with hybrid drive – the Audi R18 e-tron quattro triumphed for the first time. The four Audi R18 cars from Audi Sport Team Joest were the quickest and most reliable vehicles and after 24 hours occupied positions one, two, three and five. With its eleventh victory at Le Mans, Audi has extended its lead in the World Endurance Championship. We also participate in the VLN series which also tests the superiority of our automotive and drivers.

Raghav: Being a keen footballer and golf enthusiast myself, I have noticed that Audi is heavily invested in both. Could you share your plans for supporting and developing both sports in India beyond the metros, specially at the youth level. 

Michael Perschke: Audi AG has a long-standing relationship with sports, especially with the game of association football. Though motor sports does come more naturally for us, football has been something which has grown in importance for the company in recent years. Audi has its best known tie-up in football with German Bundesliga giants FC Bayern Munich, where Audi is not only a sponsor but also a 10% stakeholder in the Bavarian club. Audi India also has association with football in India which reiterates its ethos of progressive and sports oriented thinking. To raise the standard of football in India, Audi India kick started the first edition of the Audi Football Summit with a match between FC Bayern Muenchen, Germany’s winning team of the 1974 FIFA World Cup, and the Indian national team at Jawaharlal Nehru Stadium, Delhi on January 10 this year. With our strong association with Bayern Muenchen, we wanted to give the best exposure to millions of Indian children who love football and inspire them to achieve excellence through the game. The Audi Football Summit is also our salute to Bhaichung Bhutia, who has been the driving force in Indian football for many years. Through this partnership, Audi India seeks to bring the world’s most popular sport to India and provide a strong platform for its budding talent. Audi quattro Cup has also gained a lot of popularity in India and is ranked amongst the biggest and most popular amateur golf tournaments worldwide. The tournament which entered its fifth season in India has emerged as a popular sporting event. Played on a unique “Greensome Stableford” format, where a team consists of two golfers drawn randomly, the top two teams qualified for the Audi quattro Cup India finals. The winning team from the Audi India finals tournament then qualified to participate in the world finals of Audi quattro Cup held at the exotic Arabella Golf Club, Western Cape, South Africa from November 23 to 27.

Raghav: The Audi brand is young, progressive, design driven, stylish and sporty. But often some see it is too edgy, brash and a bit too loud for the luxe club. What’s your take on that?

Michael Perschke: Our customers are able to identify with our brand equity, which drives on sportiness, progressiveness and sophistication. This is fuelling our growth in India. The basis of our success in India comprises pioneering concepts in the domains of advanced technology and design. Audi has always been renowned for its spirit of innovation. What best reflects this spirit is quattro® – our permanent all-wheel drive which revolutionised automotive technology way back in 1985. For us, and most of the engineering world, quattro® isn’t just cutting-edge technology, it is a legend. And our fans associate with it. Over the world Audi has been constantly trying to communicate the brand values, bring about a special connection to sport and luxury lifestyles and delight the customers across regions. Communicating Audi’s core philosophy “Vorsprung durch Technik” in India, it has tried to deliver the best solution in every situation and meet our consumer’s highest expectations. We ensure that the entire experience is a memorable one. Today an Indian customer aspires to own a luxury brand like ours – one which reflects his personality, which is progressive and is seen as defined and distinct and I am sure it will only get better over the years to come.

Raghav: You remain the best social ambassador of the brand. Do you think in today’s changing times, the luxury CEO’s role extends beyond the corner office and overlaps into the personal/ social space, and is therefore more challenging?

Michael Perschke: I love my job and the challenges make it even more interesting. Over the years, I have cultivated a deep network of relationships and am on first name terms with pretty much everybody who matters in the country. I don’t sell them a car; I reach out to them, listen and understand how to position the brand in a way they can personally associate with. Baba Kalyani used to drive another car for 20 years. He now drives the A8. Adi Godrej is a customer. Narendra Pawar of NIIT, Malvinder Singh from Fortis, Pawan Munjal, Rahul Bajaj, Rajiv Bajaj, Sanjiv Bajaj, Abhishek Bachchan, Ranbir Kapoor…they’re all my customers today. These are class defining leaders and I can only say that winners associate with a winning brand.

Raghav: What would one find in your garage? And what passions do you pursue after hours? 

Michael Perschke: I have an Audi A8L, Audi A7 Sportback and an Audi Q7 in my garage. I enjoy spending time with my family, jogging in Bandra, driving the Qs on Mumbai-Pune Expressway and playing golf once in a while. Mountain Biking is a hobby I am extremely passionate about. I once travelled the Trans Alps. In Mumbai at Pali Hill, I regularly ride my mountain bike and hope to ride it in the Aamby Valley someday. I also own a Diamondback mountain bike at home in Germany.

Raghav: Any words for the youth on how Audi would continue to remain relevant to the next gen automobile customer?

Michael Perschke: We continue to work on a strategy which epitomizes whatever a young Indian stands for today – his entrepreneurial spirit, the endeavor and the aspiration for luxury. The Audi customer is young. Audi customers are game changers, successful, self-achievers and progressive in their values. We have a young and a young at heart portfolio of buyers. Today the average Audi buyer is 30-35 years old. We launched the Audi Q3 this year, targeting younger customers and hence the campaign idea “Start Young” came into being. We realized music is an engaging way to connect with the youth, so we conceptualized a music activation that tied in with an online contest through a microsite. This was seen on cinema, social, digital and mobile platforms. More than 200 people submitted their music video. The music video was launched with the Audi India YouTube brand channel and the winner got 80000 + votes for his music video. Whatever we do, we will continue to remain relevant to the youth.

Raghav: Thank you very much for your time, Mr. Perschke. It was an absolute privilege to do this Q&A session, and I look forward to interacting with you on many more occasions. Thank you once again.