Audi aims to sell 2 million cars by 2020. In order to achieve this target, they need to explore new markets, and penetrate deeper in existing markets. Establishing a manufacturing facility in Brazil will give them immense boost in capitalizing on the South American continent, which is one of the fastest growing car consumers today.
Over €150 million ($200 million) is being invested into the construction of this plant in Brazil. Besides the new Brazilian plant, a new Audi automobile production plant is being opened in Mexico as part of the company preparation to expand operations worldwide and in particular into the South American continent. The company will be expanding their dealer network in the region in their bid to be leaders in Brazil in the premium segment.
Brazil is an attractive market for luxury automobile manufacturers. BMW has also announced plans on setting up a production facility in Brazil which will commence production from 2014 while Mercedes Benz has also planned to produce their next generation C Class from Brazil starting 2015. Besides expansion into Brazil, Audi’s expansion operations also include China where the second Audi plant is set for inauguration in Foshan, later this year.
Earlier this year, ET had reported that Audi is working towards manufacturing the A3 and Q3 in India. Just like this development in Brazil, manufacturing A3 and Q3 in India will also have immense potential. It is financially not viable to produce a car in India for luxury car makers like Audi, BMW and Mercedes Benz, due to very low sales (approximately 33,000 units per year, combined).
But, if a company can make India as their manufacturing (and export) hub for a specific model, this can work in their favor as they will generate more sales. For eg, the new A3 sedan, which is built on the VW MQB platform, can become the first Audi car to be manufactured in India. The reason being, VW’s MQB platform is also going to feature on the next gen Skoda Rapid, Octavia and VW Vento for India. This makes manufacturing Audi A3 in India, financially possible.
Only time will tell if India becomes a manufacturing hub for Audi, just like Brazil, or not. As of now, buyers in India await the launch of new A3 sedan. Audi India has begun testing of this compact sedan and it is usually spotted in Mumbai. Here is one such image (credit Team-BHP) while it was out on test.