Analysis on Luxury Car Market in India

DECLARATION

I hereby declare that the project report entitled “An Analysis on the Luxury Car Market in India at Audi.” submitted by me in partial fulfillment for the award of Bachelors Degree in Business Administration of Amity University is genuine and original work / research carried out by me.

Amity Global Business School
Bangalore

Dated 6th August, 2011

Dhruv Seth
A30306409008

ACKNOWLEDGEMENTS
Behind every success, there is a driving force that motivates and inspires. I feel blessed when I say that I had not one but many sources of inspiration. I want to take this opportunity to thank each one of them in this section of the project.

First and foremost I would like to thank Prof. N. Nagamani, who has been a teacher, mentor and guide to me throughout my two years in college. She has constantly helped me throughout my project and has been there to advice me through my internship with Audi. I also would like to thank her for letting me start my internship late so that I could get into an internship that I
would like.

I want to thank Audi for taking me in as an intern, training me, and giving me a chance to hone my skills in marketing. My experience in this company taught me valuable lessons which will be with me even when I start my career and step into the corporate world.

I also want to thank Ms. Ayesha Khan , the Assistant Marketing Manager(Direct Marketing) of the company for not only being my external guide but also a mentor. She was there to support me in all the work I took up in his company and encouraged me to implement my ideas.

EXECUTIVE SUMMARY
This report focuses on the growing demand for luxury cars in India and an analysis of the large luxury automobile brands present in India, namely Audi, BMW and Mercedes.

As the number of millionaires in India is on the rise and with young entrepreneurs’ sprouting everywhere the demand for luxury automobiles is in the rise. Audi offers its customers high luxury in its vehicles and a highly efficient service network to back up its sales team.

My internship with Audi has taught me a lot about the automobile industry in India and also has enlightened me about corporate life. My experience with Audi proved that they take their mission seriously of ‘Progress through technology’.

This analysis covers Audi’s history that dates back over 100 years. It also focuses on Audis presence in India and it’s impact in India as compared to that of BMW and Mercedes. Also a report has been done on the luxury car market in India and the significant growth it is experiencing in India. The reasons as to why a person would spend money on a luxury car are also noted and analyzed. A questionnaire has been devised to find out what luxury car offering in India people are more aware of and inferences have been derived from the data collected. Finally based on the above findings and report suggestions are given to the company and bottlenecks in the industry are specified.

COMPANY PROFILE History of Audi
AUDI AG can look back on a multi-faceted history that has seen considerable change; its tradition in the manufacturing of cars and motorcycles stretches back to before the turn of the century. The marques which were originally all based in Saxony – Audi and Horch in Zwickau, Wanderer in Chemnitz-Siegmar and DKW in Zschopau – made a significant contribution to the progress of the automotive industry in Germany. These four marques merged in 1932 to form Auto Union AG. In terms of the sheer number of vehicles built, this was the second-largest motor vehicle company of its day. Four interlinked rings were adopted as its marque emblem. After the Second World War, Auto Union AG’s production plant in Saxony was expropriated and dismantled by the occupying Soviet forces.

A number of the company’s senior managers departed for Bavaria, where a new company under the name of Auto Union GmbH was founded in 1949 in Ingolstadt, upholding the motor vehicle tradition under the sign of the four rings.

Auto Union GmbH and NSU merged in 1969 to form Audi NSU Auto Union AG; this company was renamed AUDI AG in 1985 and its headquarters transferred to Ingolstadt. The four rings remains the company’s emblem to this day.

Horch

August Horch, one of the pioneering figures of Germany’s automotive industry, was the figure behind this company. A graduate of the Technical College in the town of Mittweida, Saxony, he originally worked in engine construction at Carl Benz in Mannheim, gradually working his way up to the position of head of motor vehicle construction. In 1899 he decided to set up business on his own, and founded Horch & Cie. in Cologne. He was the first in Germany to use cast aluminium for his cars’ engines and gearbox housings, a cardan shaft served as the power transmission element, and the gearwheels were of high-strength steel.

In 1902 he moved to Reichenbach in Saxony, then on to Zwickau in 1904. Cars with two-cylinder engines were built from 1903, with four-cylinder versions being added after the start of the company’s operations in Zwickau. Their performance was so impressive that a Horch car triumphed in the 1906 Herkomer Run, the world’s most arduous long-distance race. Two years on, the company recorded annual sales of over 100 cars for the first time.

After a disagreement with the board of directors and the supervisory board, in 1909 August Horch quit the company he had founded, without delay setting up another motor vehicle company in Zwickau. As his name was already in use by the original company and had been registered as a trademark, he arrived at the name of the new company by translating his name, which means “hark!”, “listen!” into Latin: Audi.

August Horch moved to Berlin in the 1920s and was appointed a member of the supervisory board of Auto Union AG in 1932, continuing to be involved in the company’s technical development work mainly in his capacity as expert. In 1944 he moved from Berlin to the Saale region. Horch spent his final years in Münchberg, Upper Franconia, where he died in 1951 at the age of 83.

August Horch demonstrated hands-on involvement in the development of the motor car from its very earliest days. His principal legacy is that his technical innovations, coupled with his remarkable resolve, paved the way for the transformation of the early motor vehicle into the car as we know it.

The company which still bore the name Horch originally adhered to a range of model types, the structure of which was still the one created by the company’s founder. After the First World War, the aircraft engine company Argus-Werke, acquired a majority interest in Horch. Two of the most renowned engineers, Arnold Zoller and subsequently Paul Daimler, son of Gottlieb Daimler, were thus elevated to the rank of chief designers for Horch-Werke’s operations in Zwickau.

In autumn 1926, Horch-Werke unveiled a new model driven by an eight-cylinder inline engine created by Paul Daimler. This engine was notable for its reliability and refinement, and set the standard which all competitors sought to emulate. The Horch 8 became synonymous with elegance, luxury and superlative standards in automotive construction.

In autumn 1931, Horch-Werke of Zwickau launched its newest top product at the Paris Motor Show: a sports convertible with twelve-cylinder engine, painted brilliant yellow, with a brown soft top and upholstered in green leather. Between 1932 and 1934, only 80 of this exclusive Horch were sold. The market for such luxury cars slumped. Horch was the clear market leader in the entire deluxe class and it sold one-third more cars than its competitors; for instance, Horch sold 773 cars in Germany in 1932 and was able to export around 300. However, this was not enough. The company encountered financial difficulties, mainly due to the financing of its sales operations. Audi

Following August Horch’s departure from Horch-Werke AG in 1909, he set up another factory which was likewise to manufacture automobiles. As Horch was not allowed to use his own name for this second company, he took the Latin translation of his name, which means “hark!”, “listen!”, and gave his new Zwickau-based company the name Audi. In 1910, the first new cars with the brand name Audi appeared on the market. They earned particular acclaim for an unparalleled string of victories between 1912 and 1914 in the International Austrian Alpine Run, generally acknowledged to be the most difficult long-distance race in the world. After the First World War, Audi distinguished itself by becoming the first brand to position the steering wheel of its production cars on the left and to move the gear lever to the centre of the car. This resulted in much easier operation.

1923 was the year in which Audi’s first six-cylinder model made its appearance. This car had an oil-wetted air cleaner, at that time definitely the exception. It was years before the air cleaner became a standard feature on all cars. This Audi also boasted one of the first hydraulic four-wheel brake systems to be used in Germany, designed and built by the company itself. In 1927, chief designer Heinrich Schuh brought the first Audi eight-cylinder model, known as the “Imperator”, onto the market. Unfortunately, this imposing car made its appearance too late: the deluxe car market was suffering a rapid decline in fortunes. The company was purchased in 1928 by Jörgen Skafte Rasmussen, the figure behind the mighty DKW Empire.

DKW

Jorgen Skafte Rasmussen, a Dane by birth, established his first company in Saxony after studying Engineering in Mittweida. In 1904 he set up an apparatus engineering company in Chemnitz, three years later moving to Zschopau, in the Erzgebirge region, where he began to experiment with steam-driven motor vehicles in 1916. Although these experiments did not lead to any specific product, they yielded the company name and trademark DKW, derived from the German words for “steam-driven vehicle” (Dampf Kraft Wagen). In 1919, Rasmussen obtained the design of a two-stroke engine from Hugo Ruppe, a tiny version of which he sold as a toy engine under the name of “Des Knaben Wunsch”, meaning “The Boy’s Dream”.

This mini engine was subsequently upscaled and used as an auxiliary cycle engine, evolving into a fully-fledged motorcycle engine called “Das Kleine Wunder” (The Little Miracle” in 1922. Under the watchful eye of J. S. Rasmussen (together with manager Carl Hahn and chief designer Hermann Weber), DKW became the biggest motorcycle manufacturer in the world in the 1920s. DKW also enjoyed a leading international position as an engine manufacturer.

In 1927, Rasmussen had acquired design and production facilities for six- and eight-cylinder engines from a Detroit automobile company which had been wound up. Two new Audi models powered by these engines appeared on the market. However, Rasmussen recognized the signs of the times and stepped up his activities in small cars. The very first DKW cars actually had rear-wheel drive and were built in Berlin-Spandau. At the end of 1930, Rasmussen commissioned the Zwickau plant to develop a car having the following design features: a two-cylinder, two-stroke motorcycle engine with a swept volume of 600 cc, a unitary wooden chassis with leatherette upholstery, swing axles at the front and rear, and front-wheel drive. The car which Audi designers Walter Haustein and Oskar Arlt came up with was given the name DKW Front. It was unveiled at the 1931 Berlin Motor Show, where it caused something of a sensation. The DKW Front was built at the Audi factory, and went on to become the most-produced, most popular German small car of its day.

Wanderer

The name “Wanderer” dates back to 1896, when its fame was associated with the bicycles built by Winklhofer & Jaenicke, a company founded in 1885 in Chemnitz. Production of motorcycles commenced in 1902, and the first trial production of motor cars took place in 1904. A small car under the name of “Puppchen” went into series production in 1913, and proved very popular. No higher-performance successor appeared until 1926, when the Wanderer Type W 10 with 1.5 litre engine and developing 30 hp made its début. This car incorporated all the latest developments in the world of automotive engineering, such as left-hand drive and a central gear lever, a multiple dry-plate clutch, a unitary engine block and gearbox, and a four-wheel brake system. This car met with an excellent market reception.

To cope with the overwhelming demand, a new production plant was built in the Chemnitz suburb of Siegmar. Parts continued to be produced at the existing factory, and were then transferred to the other plant by rail. Individual parts and assemblies were unloaded directly from the rail wagons onto the assembly line: just-in-time methods at the end of the 1920s! The buffer store in Siegmar had capacity for parts for only 25 cars – as many as could be built in a single day.

Wanderer’s marque image was characterized by its extremely reliable cars and by their outstanding manufactured quality. Such excellence had its price, however, and at the end of the 1920s Wanderer attempted to stem the looming crisis with more modern body designs and higher-performance engines. Despite these innovations, production figures slumped. Wanderer’s car production operations fell into the red. The entire motorcycles division had already been sold off to NSU and the Czech company Janecek. This prompted Dresdner Bank, Wanderer’s largest shareholder, to promote plans to sell off the automotive division and to expand the profitable machine tools and office machinery operations.

Auto Union AG

In common with the automotive industry as a whole, the 1920s were a period of
rationalization at Audi, Horch, DKW and Wanderer. Line assembly and modern machine tools had resulted in a sharp rise in production capacity, yet mass production could only work if there was corresponding market demand. Promoting sales to the necessary degree was a costly affair, and the price war triggered off by stronger competition from abroad also devoured large amounts of money. The German car industry found itself frequently unable to finance all this from its own profits, and sources of credit were needed.

In Saxony, the State Bank of Saxony had more or less satisfied Horch-Werke’s needs for capital loans, and had also paved the way for the expansion of the Rasmussen Group. The State Bank of Saxony eventually resolved to consolidate its interests in the automotive trade, and the idea of Auto Union was born. The absorbing company was Zschopauer Motorenwerke J. S. Rasmussen AG, which already owned Audi-Werke AG. Horch-Werke AG was also placed under its control, as was Wanderer-Werke’s car division through a purchase and leasing agreement. Its share capital totalled 14.5 million Reichsmarks, with the State Bank of Saxony controlling an 80 % interest.

The Creation of a Competitive Structure

The image of Auto Union AG on the motor vehicle market was shaped by the four founder marques Audi, DKW, Horch and Wanderer, together with their products. It took years to develop a consistent corporate concept and apply it to this chance constellation of highly traditional companies.

Type Development

At the 1933 German Automobile Exhibition, in which Auto Union participated for the first time in its new corporate form, the Audi marque caused a stir with its front-wheel drive for midsize cars. However, the innovative nature of this development was not reflected in higher registration figures, with avant-garde technology evidently proving to have only marginal market appeal. The concept was modified and in 1938 the Audi 920, a car which was externally very modern in design, with a high-performance engine, was launched on the market. Its newly developed OHC engine developed 75 hp,
propelling the car to a top speed of 140 km/h. This Audi was aimed at customers who wanted a powerful car, but not necessarily a large one; an Audi for dynamic, sports-minded drivers. Front-wheel drive subsequently yielded to rear-wheel drive again, and the conventional profile-type chassis was adopted instead of a central box-type chassis. The car was available as a 6-window saloon and as a two-door convertible with four windows. Demand for the Audi 920 was so high that more than a year’s production output was sold out only shortly after its launch.

At that time, the fame of the DKW marque was based primarily on its motorcycles. In 1933, the model range comprised eight different types with engines ranging from 175 to 600 cc. One year later, the RT 100 appeared on the market. With its simple, straightforward body and its combination of economy and power, it set standards that remained valid for several decades. The RT was available for an unbeatable 345 Reichsmarks, and became one of the most-produced motorcycles of all time.

The 200 Class nevertheless continued to underpin the success of the motorcycle operations in Zschopau. DKW enjoyed a clear market lead here, a fact unchanged by the appearance of the NZ series in 1938. These attractive models in the middle and upper displacement class, with four-speed gearbox, foot gearshift mechanism and rear suspension, were a fitting reflection of the advanced development status of DKW two-stroke motorcycles.

DKW’s small cars were produced both in Berlin-Spandau (rear-wheel drive and charge-pump V4 two-stroke engine) and in Zwickau (front-wheel drive, two-cylinder, two-stroke inline engine). All engines were built in Zschopau, whereas the DKW wooden chassis for the front-wheel-drive DKWs assembled in Zwickau were manufactured in Spandau. The German rail operator, the Reichsbahn, transported daily shipments of vehicle bodies to Zwickau for eight marks per body.

The DKW front-wheel-drive cars (bearing the type designations F2, 4, 5, 7 and 8) were available in two classes: the “Reichsklasse” (600 cc engine, 18 hp) and the “Meisterklasse” (700 cc engine, 20 hp). “Front Luxus” was the name of the beautiful convertible with a sheet steel body. The DKW Front models remained the most popular and best-selling small cars in Germany: in the 1930s, a quarter of a million of these cars were sold. Their front-wheel drive gave them something of a pioneering character. The F9 was the designated successor to the models built both in Spandau and Zwickau, with its new three-cylinder engine developing 28 hp and sheet steel body. It was scheduled to enter production in 1940, but then the war intervened.

Horch’s reputation for exclusive cars built in Zwickau stretched back several decades. The engines in particular served as a benchmark and were considered exemplary for both their performance characteristics and their refinement. Economy was not an issue in the deluxe class, and the “Horch 8” came to be regarded as the zenith of quality. The V8 engine developed by Fritz Fiedler was launched in 1933, initially as a 3.0 litre version; 3.5 litre and then 3.8 litre versions followed, and its power output edged up from 70 to 92 hp. Compared with the eight-cylinder inline engine developing a hefty 120 hp, it was nevertheless still the “small” Horch. Both automobile types were initially rigid-axle models whose driving properties became something of a problem at higher speeds.

In 1935, Horch’s cars were given independent front suspension and a De Dion axle at the rear (double universal joints with a rigid axle and frame-mounted differential). The Type 853 sports convertible with eight-cylinder inline engine, considered by many to be the most beautiful Horch ever built, made its début in the same year. The Horch marque was easily able to assert its leading position in the deluxe class; in 1937, it held a market share in excess of 50 percent in the 4 litre and upwards class.

Wanderer’s cars were already being propelled by the new overhead camshaft engine designed by Professor Porsche before the Auto Union era. New, modern suspension layouts and body versions were therefore developed on this basis. A rear swing axle in conjunction with a rigid front axle appeared in 1933 on the Type W 21 and 22, with independent front suspension finally being adopted for the W 40, 45 and 50 in 1935. Models with three-figure code numbers (W 240, 250, etc.) represented the transitional phase between the
two.

The dependable but very expensive OHV engine was replaced by a side-valve engine of identical power output from 1937 on. The W 24 (four-cylinder) and W 23 (six-cylinder) models first appeared on the market with these engines in 1937. The engines were standardized and the chassis largely coordinated (rigid rear axle and raised transverse springs). Auto Union’s new line of body versions first appeared on the 1936 Wanderer model W 51. From then on this line, which was inspired by American models, was echoed by all new Auto Union vehicles to a greater or lesser degree.

Centralization

In the same way that Auto Union was originally simply a new name for long-established products, the management too initially adhered to existing structures. At first, the group was managed from Zschopau (DKW’s home). In 1936 the group’s new office building in Chemnitz was completed, following conversion work. This signaled the end of separate vehicle development activities at each location: the Central Design Office and Central Testing Department were opened in Chemnitz. New group vehicles were now developed and tested here, and the prototype and a set of drawings were then handed over to the production plant.

Particular emphasis was placed on the development of two-stroke engines. Auto Union had acquired an exclusive licence from Klöckner-Humboldt-Deutz for the utilization of the Schnürle patents (the reverse scavenging principle in the two-stroke engine) for its small engines. The crucial advantage of this principle was that it significantly cut fuel consumption, while boosting power output.

Optimized Production
Wanderer’s engines were standardized, and the Horch V8 was destined to be replaced by a six-cylinder inline engine (offering higher output and greater refinement). Auto Union had made considerable progress in the development of automatic transmissions, and Auto Union’s engineers were now seeking new methods of styling and materials selection for their body development work.

The Central Body, Development and Design Office pursued the idea of streamlining from the very outset, using the patents of the Swiss aerodynamics expert Paul Jaray as its basis. The optimum aerodynamic properties were first calculated by theoretical methods, then tested out in the wind tunnel. Production-ready body versions of the DKW F9 achieved an astonishing frontal drag coefficient of cD = 0.42 (the figure for the predecessor model, the F8, was 0.58)! Even decades later, this was still par for the course for German production vehicles.

Prompted by the shortage of iron and rubber due to the arms race, coupled with the fact that wooden chassis with leather upholstery were now too costly to build (in view of the intensive manual labour required), Auto Union began development work on a plastic body in conjunction with Dynamit AG in Troisdorf. An empirical crash testing programme was developed to assess the strength of wood, sheet metal and plastic – the first in the history of the German automobile industry.

Sideswipes and lateral and offset frontal rollovers were simulated in the Central Test Laboratory in Chemnitz. Its technical division investigated all matters relating to the materials, developed alloys and special production methods, and investigated the technological suitability of all new designs. The scientific division concentrated on future engine versions, the development of transmissions, the investigation of vibration and noise, and preparations for complex tests such as the positioning of the catapults used in crash tests. The road testing division handled the practical testing programme, series testing and monitoring, and comparative testing of competitors’ products.

Auto Union enjoyed rapid expansion between 1933 and 1939: its consolidated sales rose from 65 to 276 million Reichsmarks, and the workforce grew from 8,000 to over 23,000. Annual production output of motorcycles soared from 12,000 to 59,000, and car production climbed from over 17,000 units to more than 67,000 per year. Compared with the year of Auto Union’s founding,
output of Horch cars had doubled by 1938, production of Wanderer cars was more than five times as high, and the total for DKW cars had actually risen to ten times the level at the time of the merger.

War and Liquidation

The outbreak of the Second World War brought to an end this development. Auto Union AG built its last civil vehicles in 1940. From then on, it was obliged to heed official instructions and focus its production operations on the war effort.

Auto Union AG was in existence for 16 years. For its last three years it was in effect merely awaiting liquidation, and for six years previous to that, the war had caused its automotive operations to be paralysed. Auto Union’s wealth of innovation and meteoric growth all took place within the space of its first seven years. The innovation and skill of its automotive experts is reflected in over 3,000 patents granted both in Germany and elsewhere. One in four passenger cars registered as new in Germany in 1938 was built by Auto Union. More than one-third of all newly registered motorcycles in Germany were DKWs. Auto Union AG was the behind numerous technical developments, research findings and ideas that played a pioneering role in the creation of the modern-day car.

After the end of the war, Auto Union AG’s production facilities were expropriated and dismantled by the occupying Soviet forces. In 1948 the company was deleted from the trade register of the city of Chemnitz. By this time, several of Auto Union AG’s senior management had moved to Bavaria, where the company had found a new home in Ingolstadt. A new beginning in Ingolstadt

A new company bearing the name Auto Union GmbH came into being on September 3, 1949 in Ingolstadt, to uphold the automotive tradition of the four rings. It is this company that is the actual precursor of the present-day AUDI AG. From its base in West Germany, its purpose was now to maintain the tradition that the former Auto Union AG had established in Saxony.

Life at the time of its re-establishment was frugal, so small, economical vehicles were called for. In the early years, the only vehicles built in Ingolstadt with the four-ring emblem were DKW motorcycles and cars, with their typical two-stroke engines. The formal re establishment of the company in 1949 was actually already the second step towards a new beginning after the war. The first move after “zero hour” took place on December 19, 1945, when the “Zentraldepot für Auto Union Ersatzteile GmbH” was founded in Ingolstadt. This central depot had the task of supplying spare parts for all pre war Auto Union vehicles that had survived the ravages of the past six years; there were all of 60,000 such vehicles in the western occupied zones.

So why Ingolstadt?

One argument in favour of Ingolstadt as the home of the central depot was its good transport connections, located as it was at the heart of Bavaria. Influential figures in the Ingolstadt city authorities presented a good case in favour of the central depot, arguing that it would aid the regional employment market. However, the key reason for the re-establishment of the company in Ingolstadt was its centuries-old military tradition as a garrison town: this legacy included expansive outdoor areas and numerous barracks, outbuildings, casemates and the like – invaluable assets at a time when there was precious little capital for erecting new buildings.

From its headquarters in the former army supplies office in Schrannenstrasse, the company was gradually able to take over a variety of other buildings such as the Friedenskaserne barracks, the New Arsenal, the NCOs’ building, the vehicle halls, the ammunition store, the riding hall and the large parade ground. As its facilities were scattered all over the city, a rational production process was scarcely possible. The workers referred to it tongue-in-cheek as the “United Hut and Shed Company.”

The “Bavarian Strike”

August 9, 1954 saw the outbreak of a strike in the Bavarian metalworking
industry which many inhabitants of Ingolstadt still vividly recall. This was one of the first major industrial disputes in the young Federal Republic of Germany, and companies in the metalworking sector even went so far as to call it the “most stirring and significant event of the post-war years.”

Auto Union, one of the largest employers in the city, with a workforce of around 5,000, likewise saw most of its workers lay down their tools. Their demands included a shorter working week, higher pay and better working and living conditions. The “Bavarian strike” lasted until August 31, 1954, when an agreement was finally reached through arbitration. An average pay increase of just over four percent was the outcome.

The Liaison with Daimler-Benz

The “Bavarian strike” cost Auto Union around DM 920,000. 1954 was nevertheless the first year in which the company recorded a notable profit (around DM 400,000). In the same year Friedrich Flick, the majority shareholder in the iron and steel works Eisenwerk-Gesellschaft Maximilianshütte mbH Sulzbach-Rosenberg, popularly known as “Maxhütte”, acquired a financial interest in Auto Union GmbH. He realised some years previously that the Ingolstadt car manufacturer would one day need a partner with plenty of capital.

In 1957, Flick advocated the takeover of Auto Union by Daimler-Benz. At that time, he owned 41 percent of Auto Union’s shares, as well as a 25 percent stake in Daimler-Benz. He could also rely on the backing of the Swiss industrial magnate Ernst Göhner, who likewise held a 41 percent interest in Auto Union. Daimler-Benz AG accepted the offer. In view of growing pressure from foreign competition, it wanted to extend its production range in market segments lower down the range. Flick also dropped Daimler-Benz a large hint that he was in negotiation with Ford, too.

On April 24, 1958 Daimler-Benz acquired around 88 percent of Auto Union’s shares for just over DM 41 million. One year later, in 1959, the remaining shares were also sold to Daimler-Benz. Daimler’s board of management spokesman Fritz Könecke summed up the merger of Germany’s second-largest and fifth-largest car manufacturers as follows: “We have married a nice girl from a good, old-established family!” On April 9. 1958 the business newspaper “Handelsblatt” wrote: “With the takeover of Auto Union GmbH, which reports annual turnover of around DM 400 million and employs a workforce of 10,000, the Daimler-Benz Group is now once again the Federal Republic of Germany’s largest car manufacturer in terms of sales revenue, too.”

A New Plant in Ingolstadt

At the time of the Daimler-Benz takeover, the only Auto Union vehicles in production in Ingolstadt were motorcycles and the DKW rapid delivery van. Auto Union’s car production operations were concentrated at the Düsseldorf plant that had gone into operation in 1950. For want of capital, the company had put back production of a modern, low-priced small car that had been in development since the mid-1950s and that was one day to be launched under the name “DKW Junior”. Although the takeover by Daimler-Benz guaranteed the necessary funding of the long-overdue project, the company was short of the production capacity needed.

A new plant therefore had to be erected without delay – either in Ingolstadt, or in Zons, near Düsseldorf, where the company had already acquired an industrial site. Fritz Böhm, at that time Chairman of the Works Council and a member of the State Parliament, is said by former colleagues to have “fought like a lion” to have the new factory built in Ingolstadt. Thanks to his useful contacts with the world of politics, the Free State of Bavaria was always “one step ahead” of North Rhine-Westphalia. An investment loan of DM 25 million from the Bavarian State Bank played a major part in the company’s ultimate choice of Ingolstadt.

Another factor which argued in Ingolstadt’s favour was the impending collapse in business for two-wheelers: in view of plummeting demand for motorcycles, there were plans to wind down DKW motorcycle production in the short term. In contrast to the Zons location, there were considerable numbers of qualified workers available in Ingolstadt – in the late 1950s, a major consideration whenever a company was deciding where to locate. In July 1958, construction work on the new plant in Ettinger Strasse finally began. A sum of DM 76 million was invested here in 1959, and a further DM 51 million in 1960. The regional newspaper, Donaukurier, wrote euphorically: “One of the largest and most modern car plants in Europe is currently being erected near Ingolstadt”.

The deal between VW and Daimler-Benz

At the end of 1958, Auto Union had 3,700 employees in Ingolstadt; twelve months later, the figure had soared to 5,700. The construction of the new plant not only meant that the workforce had grown dramatically. It was also the principal factor behind Auto Union’s decision to transfer its production to Ingolstadt in 1961, followed by its administrative headquarters in 1962. The desired rationalization and cost-cutting effects materialized, but from 1962 Auto Union’s production and sales figures both took a downturn, at a time when the parent company was experiencing a boom in both production and sales.

In 1964 in particular, Auto Union was confronted with acute financial difficulties. Daimler-Benz AG, increasingly going at arm’s length to a subsidiary that was proving too difficult for comfort, for all its pedigree, decided that the best solution was what turned out to be a spectacular commercial transaction: the sale of Auto Union to Volkswagen. Issue 45 of the news magazine “Der Spiegel” wrote: “Daimler-Benz’s prominent shareholder Friedrich Flick spent more than a year devising, rethinking and fine-honing the latest big scheme in his eventful career, “going on to comment that Flick had not only masterminded “the biggest business event of 1964,” but had also been instrumental in laying down its finer details.

Ownership of Auto Union GmbH was transferred to VW AG in several stages, from 1964 on. Its new owner spent a total of DM 297 million on the transaction, and by 1966 had all the company’s shares in its possession.

Good times, bad times…

The takeover by VW meant that Auto Union escaped going into receivership by a hair’s breadth. The era of the two-stroke engine, formerly so popular, was coming to an end, and almost 30,000 unsold DKW cars were destined for the scrap heap. It was the VW Beetle which came to the rescue: between May 1965 and July 1969, almost 348,000 of the VW Beetle were assembled in Ingolstadt. From August 1965, the situation was also alleviated by the launch of the new “Audi”. This car, the first one with a four-stroke engine to be built in Ingolstadt, aroused considerable market interest and established the basis of a successful model range. However, the recovery was only short-lived. After more than fifteen years of seemingly unstoppable economic recovery, in 1966/67 Germany suddenly went into a recession which hit Auto Union badly: production had to be cut back dramatically, and short-time was the inevitable consequence.

On March 10, 1969 Auto Union GmbH signed a merger agreement with NSU Motorenwerke AG (Neckarsulm). The establishment of the new company with the name Audi NSU Auto Union AG was backdated to January 1, 1969. This company, whose headquarters were in Neckarsulm, adopted a course of growth and expansion from the outset. Production of Audi and NSU cars rose steadily until 1973, when initial signs of the oil crisis emerged. In 1974, the weakening of the international economy had such an adverse effect on the market that the company had to scale down production to 330,000 vehicles, from almost 400,000 in the previous year. Such a radical measure inevitably cost a considerable number of jobs: in 1974, the total workforce fell from 33,800 to 28,600; in 1975, 1,700 jobs were lost at the Ingolstadt plant alone.

Entering a New Dimension

The car industry recovered at the end of 1975, a development that was reflected in the sales volume of Audi models. The last NSU Ro 80 left the assembly line in March 1977. This signalled the disappearance of the NSU brand, which dated back more than 100 years. Since that year, all cars built in Neckarsulm have borne the name “Audi”.

Audi caused a sensation in 1980 with the launch of the Audi Quattro, the first volume production car with permanent four-wheel drive. Audi’s rally sport activities served to underline the revolutionary nature and overwhelming superiority of its Quattro concept: in 1982, Audi became the first German brand to win the intensely fought-over Manufacturers World Championship, a feat which it repeated in 1984.

In 1982 Audi establish a record of another kind: with its drag coefficient of cD 0.30, the third-generation Audi 100 achieved the best aerodynamic performance of any volume-produced saloon in the world. Audi had come up with the right response to the challenges of the moment, at a time when there were increasing calls for environmental protection and economical use of fuel.

On January 1, 1985 Audi NSU Auto Union AG was renamed simply AUDI AG. The company’s registered headquarters were simultaneously transferred from Neckarsulm to Ingolstadt. In the mid-1980s, Audi – along with other German car manufacturers – began to feel the impact of a high-profile public debate on stiffer speed limits and reduced exhaust emissions. Whereas domestic sales fell by 7.5 percent in 1985, exports rose by 9.4 percent.

In 1985, AUDI AG’s capital investments totalled almost DM 1 billion, the highest figure in the history of the company. Product-related measures and new production technology were the investment priority. In autumn 1986, the new Audi 80 with fully galvanized body was launched. It came complete with a ten-year warranty against rust penetration, setting new standards in this class. 1988 saw the appearance of the V8, Audi’s first deluxe-class car, with a 3.6 litre V8 engine and four-valve technology.

Audi’s slogan “Vorsprung durch Technik” –meaning “Advancement through Technology”, even though the German version may actually be more familiar in the English-speaking world – is also substantiated by the TDI engine concept. Its extremely low fuel consumption was documented impressively in several economy test runs: in 1992, a standard Audi 80 TDI drove all round the world, covering a distance of 40,273 km and clocking up an average consumption figure of 3.78 litres of fuel per 100 km (74.7 mpg) and an average speed of 85.8 km/h.

In the early 1990s, the market worldwide was generally weak, but the fall of the Berlin Wall and German monetary union generated an immense surge in demand on the domestic market. This sales boost on its home market helped Audi achieve record breaking sales revenues of DM 14.8 billion in 1991. However, by 1993 it was obvious that the special boom in Germany had only been able to allay the general downward trend for a couple of years.

Audi heralded in a new era in presenting the ASF (Audi Space Frame) aluminium study vehicle in autumn 1993 at the Tokyo Motor Show. The aluminium Audi celebrated its world début in March 1994, as the successor to the Audi V8. The new model designation A8 signalled a radical shift in Audi’s model-naming policy. The Audi A6 followed in the summer, with the new A4 being launched in November 1994. This latter model rapidly brought further success to the company: in 1995, 120,000 of the Audi A4 were sold in Germany alone.

In autumn 1995, Audi produced its next trump in unveiling the sports car studies TT Coupé and TT Roadster: these concepts successfully blended distinctive automotive design based on nostalgic throwbacks with modern stylistic features and mature technology. One year on, Audi launched the A3, an attractive two-door compact model intended to draw new customer groups to the brand. In 1997, Audi presented the new Audi A6 and also the Al2 study vehicle, the latter an all-aluminium model based on second-generation ASF technology. The Audi TT Coupé and Audi TT Roadster production models were launched in 1998 and 1999.

Since 1994, the company’s key business figures have benefited from an uninterrupted upward trend. Audi has become an international developer and manufacturer of high-quality cars. The company maintains production sites in Germany, Hungary, Brazil, China and South Africa. Audi sold over 650,000 vehicles in 2000. Sales totalled around DM 39 billion (including the Italian
sales subsidiary Autogerma). The Audi Group has around 50,000 employees.

Organisational Structure

CEO

Rupert Stadler

Chairman of the Board
Martin Winterkorn

Vice Chairman of the Board
Berthold Huber

Director
Franz-Josef Paefgen

Director
Bruno Adelt

Director
Helmut Aurenz

Director
Francisco Sanz

Director
Hans Dieter Poetsch

Director
Horst Neumann

Director
Joerg Schlagbauer

Director
Wolfgang Mueller

Director
Ferdinand Porsche

Director
Michel Piech

Director
Ferdinand Piech

Director
Max Waecker

Director
Heinz Eyer

Director
Peter Mosch

Director
Norbert Rank

Director, Employee Represent…
Johann Horn

Honorary Chairman of the Boa…
Carl Hahn

Director, Employee Represent…
Helmut Spath

Director, Employee Represent…
Peter Kossler

CFO
Axel Strotbek

Mission Statement
The mission statement of Audi is:
“Audi is a manufacturer of exquisite cars – beautiful, sophisticated machines that embody technological perfection. Our success is built on our core values of creativity, commitment and enthusiasm, and keeping our customers’ desires at the heart of everything we do. We strive to lead the way through constant innovation, setting new standards that define Vorsprung durch Technik.”

The vision statement of Audi is:
“Audi, the number one premium brand

Audi in India
Audi India started operating in 2007 by establishing its own sales company in Mumbai. The company started production of Audi A4 in November 2007, followed by Audi A6 in 2008 in its Aurangabad plant. Rest of the models – Audi A8, Audi Q5 and Q7, Audi TT and super speed racing car Audi R8 are imported as CBUs. Audi invested significantly in brand building, marketing the product qualities and improving after sales services in India. Audi offers technology with composure and agility to current techno affluent Indian youth. Known for its technology, luxury and style, this German car maker has received five different awards by Indian auto media. Audi’s commitment to innovative and sophisticated design is widely endorsed by car buyers. One of the reasons of Audi’s global success is its ability to identify potential markets for expansion. The company selected India as its second production site after China. The local production provides Audi, ability to cater customer needs in a cost effective manner.

Audi is always a first choice of techno-geeks who want to get more involved during the drive. Besides being the fastest growing luxury brand in India, Audi regularly brings new models and variants of existing models to surprise
the car lovers. Audi Q5 is the most endorsed imported sports utility vehicle (SUV) in India. The company followed the same dealership location strategy as BMW by selecting similar sales regions of high demand (four dealership locations in northern and central regions- Delhi, Gurgaon, Chandigarh and Ludhiana) at 13 locations country-wide. Due to these efforts, Audi has rapidly captured market in India and has exerted considerable pressure on the other dominant players. The company noticed a 65% jump in sales (200 cars) in May 2010 compared to May 2009 (121 cars). Both Audi and BMW have focused in the world class music system facility and ultra luxury looks in their models. Luxury car segment is going to change as there are many new cars lined-up for launch during the period 2010-2012 with approximately 50 to 60 new models from major global brands. Tata Jaguar, Lexus, Bentley and Fiat are some of the players who would be seen as aggressive entrants with their high market experience. The market future will not only be driven by product itself but also services associated with it. So it would be a war of biggies, competing on diverse parameters. Automobile market will be noticing a great shift but as the previous pattern of market shows, the only mantra of success will be a holistic approach aligned to the company’s brand image and customer oriented vision.

Audi in India now has a strong presence with Audi slowly catching up on the sales figures posted by BMW and Mercedes. Recent figures for the month of June 2011 show a 75% increase in sales as compared to sales figures of June of last year.

Earlier, the market perception for German cars was restricted to 2 major brands –Mercedes and BMW. But in the recent years, the Four Rings, especially the A6 and Q7, have captured the Indian fancy like no other brand. Addressing this spurt in demand, the company has lined up a fantastic plan for the next 2 years.

The start of the year saw the launch of the iconic Ironman’s car- The Audi R8 in its V10 avatar. Audi-India already seen around 14 bookings for the mighty beast and plans to bring the Spyder version as well has been successful.

Then came February and Audi dropped another bombshell from its portfolio by bringing in the flagship saloon – A8. Coupled with gorgeous looks and gadgetry that seems to be made by Steve Jobs, this luxury car is sure to give a tough fight to market leader Mercedes S Class.

In March, Audi brought a third engine option for the Q5, a 2.0 TDI diesel mill which will be priced at Rs 42 lakh, ex-showroom, Mumbai.

In June, we saw the A7 sportsback hitting the Indian streets. With the A7 hitting the Indian streets, a whole new segment will be created for itself. It is expected in both the 3.0 TFSI as well as 3.0 TDI engine options and will be priced at round about Rs 65 to 70 lakhs.

Recently in August, we saw another major launch from Audi – The A6 Saloon. The old A6 did not find many buyers in the Indian market because of its timid street presence as compared to other rivals such as the flamboyant 5 Series and the exquisite E class.

However, Audi has learnt its lesson and designed a very eye catching new A6 with oodles of street presence. The company offers three engine options starting from 2.8 TSI petrol and then moving to the 3.0 TFSI petrol and finally the 3.0 TDI quattro. Looking at the competition, the prices will be in the range of Rs 37-48 lakhs. The company also has plans to bring the S6 performance package.

Audi also decided to bring in the RS5 coupe for India. Audi India MD Michael Perschke says that he hopes to sell 30 to 50 units of this grand tourer in India in its very first year.

Audi India’s car lineup
Audi offers 9 off it’s models in India with a variety of engine options on offer. Customers can chose between the more fuel efficient diesels or speedier petrol engine option. Audi’s Indian car lineup is divided into two types- regular and flagship models. The flagship models include the A8, R8, A7, Q7, RS 5. All the other models including the A6 and the A4 comprise the
regular Audi models. Given below is a detailed spec sheet of the cars Audi offers in India- * Audi A4

Specs| Audi A4 1.8 TFSI| Audi A4 2.0 TDI Multitronic| Audi A4 3.0 TDI quattro| Audi A4 3.2 FSI quattro| Overall Length (mm)| 4703| 4703| 4703| 4703|
Overall Width (mm)| 1772| 1772| 1772| 1826|
Overall Height (mm)| 1427| 1427| 1427| 1427|
Kerb Weight (kg)| 1450| 1430| 1690| 1630|
Mileage Overall (km/liter)| 8.96| 11.5| 10.6| 6.7|
Seating Capacity (person)| 5| 5| 5| 5|
No of Doors| 4| 4| 4| 4|
Displacement (cc)| 1798| 1968| 2967| 3197|
Power (PS@rpm)| 161@4500| 140@4000| 240@4000| 265@6500| Torque ( Nm@rpm)| 250@1500| 320@1750| 500@1500| 330@3000| Transmission Type| Automatic| Automatic| Automatic| Automatic| Gears| 6| 6| 6| 6|

Minimum Turning Radius (meter)| 5.6| 5.6| 5.6| 6.1|
Tyres| 205/55 R16| 205/55 R16| 205/55 R16| 225/50 R 17|

Avg. Ex-Showroom Price | Rs. 28,89,777| Rs. 30,88,628| Rs. 38,75,379| Rs. 38,33,314|

* Audi A6
Specs| Audi A6 2.7 TDI| Audi A6 3.2 FSI quattro| Audi A6 2.8 FSI| Audi A6 3.0 TDI quattro| Overall Length (mm)| 4916| 4916| 4916| 4916|
Overall Width (mm)| 1855| 1855| 1855| 1855|
Overall Height (mm)| 1459| 1459| 1459| 1459|
Kerb Weight (kg)| 1625| 1640| 1540| 1745|
Mileage Overall (km/liter)| 11.86| 6.1| 9.32| 9.84|
Seating Capacity (person)| 5| 5| 5| 5|
No of Doors| 4| 4| 4| 4|
Displacement (cc)| 2698| 3132| 2773| 2967|
Power (PS@rpm)| 180@3300| 256@6500| 204@5500| 233@4000| Torque ( Nm@rpm)| 380@1400| 330@3250| 280@3000| 450@3250| Transmission Type|
Automatic| Automatic| Automatic| Automatic| Gears| 6| 6| 6| 6|

Minimum Turning Radius (meter)| 5.9| 5.9| 5.8| 5.9|
Tyres| 245/45 R17| 225/50 R 17| 245/45 R17| 225/50 R 17| Avg. Ex-Showroom Price | Rs. 38,73,746| Rs. 45,00,000| Rs. 41,41,763| Rs. 47,63,847|

* Audi A8

Specs| Audi A8 L 3.0 TDI quattro| Audi A8 L 4.2 quattro| Overall Length (mm)| 5267| 5267|
Overall Width (mm)| 1949| 1949|
Overall Height (mm)| 1471| 1471|
Kerb Weight (kg)| | |
Mileage Overall (km/liter)| | |
Seating Capacity (person)| 5| 5|
No of Doors| 4| 4|
Displacement (cc)| 2967| 4163|
Power (PS@rpm)| 250@4000| 372@6800|
Torque ( Nm@rpm)| 550@1500| 445@3500|
Transmission Type| Automatic| Automatic|
Gears| 8| 8|
Tyres| 235/55 R18| 235/55 R18|
Avg. Ex-Showroom Price | Rs. 77,85,268| Rs. 88,76,788|

* Audi Q5
Specs| Audi Q5 2.0 TFSI quattro| Audi Q5 3.0 TDI quattro| Overall Length (mm)| 4629| 4628|
Overall Width (mm)| 1880| 1879|
Overall Height (mm)| 1653| 1651|
Kerb Weight (kg)| 1740| 1895|
Mileage Overall (km/liter)| 6.44| 8.36|
Seating Capacity (person)| 5| 5|
No of Doors| 4| 5|
Displacement (cc)| 1984| 2967|
Power (PS@rpm)| 211@4300| 240@4000|
Torque ( Nm@rpm)| 350@1500| 500@1500|
Transmission Type| Automatic| Automatic|
Gears| 7| 7|
Minimum Turning Radius (meter)| 5.8| |
Tyres| 235/60R 18| 235/60R 18|
Avg. Ex-Showroom Price | Rs. 42,56,173| Rs. 46,96,911|

* Audi Q7
Specs| Audi Q7 3.0 TDI quattro| Audi Q7 4.2 TDI quattro| Overall Length (mm)| 5086| 5086|
Overall Width (mm)| 1983| 1983|
Overall Height (mm)| 1737| 1737|
Kerb Weight (kg)| 2295| 2450|
Mileage Overall (km/liter)| 8.2| |
Seating Capacity (person)| 5| 7|
No of Doors| 5| 5|
Displacement (cc)| 2967| 4134|
Power (PS@rpm)| 233@4000| 340@4000|
Torque ( Nm@rpm)| 500@1750| 760@1750|
Transmission Type| Automatic| Automatic|
Gears| 6| 6|
Minimum Turning Radius (meter)| 6| |
Questionnaire And Data Collection | Questionnaire And Data Collection | Questionnaire And Data Collection | Avg. Ex-Showroom Price | Rs. 55,84,578| Rs. 65,83,913|

* Audi R8
Specs| Audi R8 4.2 FSI quattro| Audi R8 5.2 FSI quattro Spyder| Overall Width (mm)| 1904| 1904|
Overall Height (mm)| 1249| 1244|
Kerb Weight (kg)| 1560| |
Mileage Overall (km/liter)| 5| 7|
Seating Capacity (person)| 2| 2|
No of Doors| 2| 2|
Displacement (cc)| 4163| 5204|
Power (PS@rpm)| 420@7800| 525@8000|
Torque ( Nm@rpm)| 430@4500| 530@6500|
Transmission Type| Manual| Automatic|
Gears| 6| 6|
Minimum Turning Radius (meter)| | 5.9|
Tyres| Front: 235/35 R 19 , Rear: 295/30 R 19| Front 235/35 R 19, Rear 295/30 R 19| Avg. Ex-Showroom Price | Rs. 1,15,32,000| Rs. 1,42,28,163| | | |
* Audi A7
Overall Length (mm)| 4969|
Overall Width (mm)| 1911|
Overall Height (mm)| 1420|
Wheel Base (mm)| 2914|
Front Track (mm)| 1644|
Rear Track (mm)| 1635|
No of Doors| 4|
*
*
Engine| |
Engine Type/Model| V6 engine with 90° V angle|
Displacement cc| 2967|
Power (PS@rpm)| 245PS @4000rpm|
Torque (Nm@rpm)| 500Nm @1400rpm|
Price: Rs. 64,47,333

* Audi TT
Dimensions and Weights| |
Overall Length (mm)| 4178|
Overall Width (mm)| 1842|
Overall Height (mm)| 1352|
Wheel Base (mm)| 2468|
Front Track (mm)| 1572|
Rear Track (mm)| 1558|
Boot Space (liter)| 290|
Kerb Weight (kg)| 1430|
No of Doors| 2|
Engine Type/Model| Aluminum V6 spark-ignition engine with gasoline direct injection| Displacement cc| 3189|
Power (PS@rpm)| 250PS @6300rpm|
Torque (Nm@rpm)| 320Nm @2500rpm|
Price: Rs. 46,00,000

* Audi RS 5
Dimensions and Weights| |
Overall Length (mm)| 4649|
Overall Width (mm)| 1860|
Overall Height (mm)| 1366|
Wheel Base (mm)| 2751|
Front Track (mm)| 1586|
Rear Track (mm)| 1582|
Kerb Weight (kg)| 1725|
Gross Vehicle Weight (kg)| 2225|
No of Doors| 2|
Engine Type/Model| V8 spark-ignition engine, four-valve technology, DOHC| Displacement cc| 4163|
Power (PS@rpm)| 450PS @8250rpm|
Torque (Nm@rpm)| 430Nm @4000rpm|
Price: Rs. 77,14,000

Review of Audi’s Indian car lineup

* 2010 Audi A4 2.0TFSI

The A4 quattro is Audi’s smallest and least costly all wheel drive sedan, but that doesn’t mean that it’s boring to drive, or sparsely featured. Starting with the 2.0 liter turbocharged direct fuel injected (TFSI) engine, and quattro permanent all wheel drive system, up through the beautifully finished interior with power windows, automatic climate control, leather seats, excellent audio system with standard satellite radio and aux input
jack, you begin to realize, this car has a lot to offer.

The lower center of gravity and increased spring rates and shock damping work well in spirited driving, while retaining a civilized ride, even with the ultra low profile tires. The B8 A4 is incredibly fun to drive. We found it equally at home on tight twisty mountain roads, as well as on the highway for long drives. It seems the harder you lean the car into corners, the happier it becomes. Even while applying full power in a corner, the car does not understeer at all, the rear just digs in, and the car hurls itself through the corner. As the limit of adhesion is reached, the A4 will tend towards understeer, and the rear end always feels planted. Overall though, the A4 feels incredibly well balanced while driving, exhibiting mostly neutral handling tendencies. With the ESP turned off, aggressive drivers can get more rotation from the rear, and the car is still very controllable and confidence inspiring.

Steering feel is excellent, and feedback is good. The rack is nicely weighted, not falsely heavy, but not overly boosted either. With Servotronic variable assist, parking is a non issue. As speed increases, the transitions from high assist to low assist are seamless, and feedback remains constant. The steering wheel does feel somewhat isolated from the road, but not as much as it could. There is enough feedback to know when the tires are reaching their limit of adhesion, yet you don’t feel every single imperfection on the road.

Audi has utilized their excellent turbocharged 4 cylinder engines in the A4 since the beginning, and the 2.0TFSI engine in the current generation is outstanding. Generating 211hp from 4300 to 6000rpm and a whopping 258lb/ft from 1500 to 4200rpm, it certainly has the grunt to move the car very swiftly. Looking at the power curve relative to the torque curve, it’s clear that this is not an engine that you need (or even want) to rev out. It’s perfectly happy cranking away under 5000rpm, and going beyond that is not beneficial. The engine doesn’t get noisy or thrashy in any way (as 4 cylinders go, the 2.0TFSI is very smooth and quiet), but it just feels like it runs out of breath over 5500rpm. Short shifting is the way to drive
quickly with this engine.

This is not to say that the car is slow however. Audi say that the manual transmission A4 2.0T will run from 0-60 in 6.4 seconds, and in real world driving such as merging on the highway or passing multiple cars on a 2 lane, acceleration is brisk, thanks to the massive torque.

Our tester was equipped with the 6 speed manual transmission, which we liked. Initially we felt the feel of the lever to be slightly rubbery, though we quickly acclimated to its action. The gate is very positive, we never missed a gear change. While the lever appears to be long, the throws are not, and it’s a very pleasant overall experience. The clutch takes up immediately off the floor, and while it does lack a certain amount of feedback, it makes up for that by being incredibly flexible. Heal/toe downshifts are possible thanks to good pedal spacing and a properly firm brake pedal.

On the road, the A4 is quite comfortable. The ride is firm, but not jarring, even with the sport suspension and 18” high performance tires. We found the seats to be nicely comfortable on long drives, yet supportive in spirited driving. There is enough range in adjustment that anyone should be able to find a perfect driving position. This car is very nice to drive. It’s very responsive, and amenable to doing double duty as a commuter car and a canyon carving sports sedan. One very minor gripe we came up with is a very noticeable surging from the engine while cruising at lower revs (specifically in the 1800 to 2200 range). We suspect that the always eager turbocharger is the culprit here; the engine management appears to constantly fiddle with the turbocharger bypass system in order to maintain the speed that’s requested by the driver. This is the tradeoff with a turbocharger that will generate boost at such low revs, and in all honesty, it’s not that big of a problem, but it is something we noticed.

Another benefit of this engine is excellent fuel economy. We were amazed at the mileage we were seeing, and it’s not that we were necessarily gentle
with the accelerator pedal. Because of the abundance of low end torque, the car reaches cruising speeds very rapidly, and once attained, the engine’s load becomes light, and therefore fuel economy increases. According to the trip computer we averaged around 30mpg (which did include a couple of long highway drives) while we had the car which was a very nice surprise.

The interior of the A4 shows off Audi’s traditional attention to detail. Even though our car did not have the MMI system, we found the control panel for the audio system mounted above the climate control system to be completely intuitive, and in fact it mirrors the MMI controls, minus the buttons for the navigation. The base level sound system is excellent, and with the iPod integration, satellite radio, am/fm/cd plus an SD card slot, all controlled from the same place, it seems like it would be impossible to not find something to listen to. All control surfaces are softly textured plastic, and nice to the touch. The window switches were a little on the “plasticy” side, but that was the only sub-par detail we noticed. Beneath the extendable and height adjustable center armrest is a nice storage cubby, with a 12v outlet for charging phones or other electronics. In front of that, there are 2 cup holders, which are nice and deep, and work well.

Cruising in the A4 is calm and quiet. The interior is very hushed with the windows closed, wind noise is minimal, although road noise is somewhat present. In 6th gear, the revs are so low that the engine note is reduced to a very low hum. As revs increase, the engine takes on a nice mid tone growl. At no point do you get to hear the turbo though, which is a bit of a bummer honestly.

We consider the A4 to be a great car for a blend of sporty driving and family duties, it’s fun to drive, has enough techno-gadgets to keep people interested for longer drives, room for 5, and excellent luggage capacity, and all weather sure footed traction. We really enjoyed our test of the A4, and we’re certain we’d enjoy spending even more time with this excellent car

* Audi A6 3.0TFSI Quattro

The A6 doesn’t really look big sitting by itself. The proportions of the body are perfect, and if anything, it looks like it might be only slightly larger than A4. The nose is a bit deeper than that of an A4, the grille a bit taller. The body lines are not quite as flamboyant, the A6 is much more subtle, more elegant, visually masking the true size of the car.

The design is largely unchanged from when the C6 A6 was launched in 2005, though it received a subtle refreshening 2009. Even though the A6 is still is fitted with the older style door handles (the lift up type), the design is nevertheless ultra modern, and in keeping with Audi’s current look for the full range of models, with elements such as the sculpted chin and the gentle upward curving character line at the bottom of the doors.

Inside is where big cars rule over smaller cars. No one wants to have to fold and cram themselves into a tiny car, with tiny uncomfortable seats, and nothing to look at or play with once there. Even though the A6’s interior design is now 5 years old, it still looks very fresh and modern.

We love the A6 dash. The instruments are not buried deep in a binnacle, instead they are very much front and center, essentially flush with the same plane as the MMI display screen. The driver information screen, which is located between the speedometer and the tachometer is in color when the Navigation is fitted to the car (as opposed to LCD), and is very clear. Using the controls on the windshield wiper stalk on the right side of the column, drivers can cycle through various trip related data such as time, distance, mileage, etc, and can also view navigation information, as well as display audio information.

The center console is the piece de resistance of the interior. This is the original layout of Audi’s MMI system, though updated with the 3rd Generation joystick atop the main command dial, which allows scrolling about the navigation system’s map to locate stopover points, points of interest, and more. MMI is a masterpiece control interface combining the functions of Navigation, audio, telephone, various and sundry car related items such as exterior lighting options, service indicators, and so on. It seems somehow
more elegant in the A6 than in the A4/A5/Q5, given the lovely arched wooden trim plate, but it’s identically intuitive and useful.

Our car was equipped with the incredibly cool Audi Advanced Key, which allows the driver to keep the key in pocket or purse, and simply press the Engine Start button to start the car. Given that this is the first generation Intelligent Key, the A6 has a separate button to then stop the engine, and also lock the steering. The key is still of the flip-out variety, which means there is a standard type ignition switch on the dash. On cars with the Advanced Key, each of the exterior door handles is fitted with a small rubber coated button, which tucks underneath and is nearly invisible. A simple tap of that button with the Advanced Key in your pocket will cause the car to lock up. All it takes to get back in is give a tug of one of the handles. Honestly, this is one of our favorite features of the newer Audis.

Once within the spacious confines of the A6 cabin, occupants are coddled by some of the finest seats in the business. It’s quite possible to become completely comfortable in seconds thanks to the 12 way adjustable leather seats. The leather is supple, but not too soft or thin feeling. Drivers and passengers will find leg, head, hip, shoulder, knee room in abundance. Our only gripe is with the electronically adjustable steering column – we wanted it to extend farther for some reason. It seemed that we would adjust the seat to where we wanted it for a comfortable leg bend, but then we sometimes felt our arms were extended a bit too much. But that was a very minor issue most of the time. The trunk is cavernous, wide enough for golf bags, deep enough for very large suitcases.

Audi is also renowned for being fanatical about safety. The A6 comes standard with front and side airbags, as well as Sideguard curtain airbags. Other driver aids like anti lock brakes with brake assist, stability control, and the optional reversing camera and proximity sensors help the driver maintain safe operation. to be floaty at speed, but we found the A6 to be perfectly damped, while not being harsh in town at lower speeds.

Handling feel is one other area where larger cars sometimes suffer to the
smaller sports sedans. We found that the A6 was pleasant to drive in a spirited fashion. Even though It’s not exactly the kind of car you’d want to toss into corners with abandon, if driven in a smooth flowing way, it’s quite possible to drive tight twisties very quickly. Certainly the abundance of power from the 3.0T, and the rear biased quattro all wheel drive system allows drivers to apply power very early to help cornering.

As is the norm with recent Audis and the rear biased quattro system, the A6 corners very neutrally right up to the limit of grip, where it begins to understeer. As we’ve found with other Audi models, when ESP is turned OFF, the handling is sportier, and the car will allow itself to rotate a bit more at the rear when trailing the throttle. If driven like a big car (smoothly, flowing it into turns instead of trying to wring it’s neck), the A6 is deceptively fast, while remaining supremely comfortable and composed the entire time.

When paired with the 3.0TFSI supercharged direct injected engine and 6 speed Tiptronic transmission, the A6 will move with surprising ease. The 6 cylinder engine is silky smooth, with good low end power culminating in a rush of power as the revs increase. The exhaust note is worth mentioning, it is very deep and throaty sounding in this car, very nearly sounding like a V8 in fact. We loved the way our car sounded as it ran up through the revs! Audi says that the engine produces 300hp at 5100 rpm, and 310 lb/ft between 2500 and 5100 rpm. Because of the flat torque curve, and smooth and quiet nature of the car which masks the sensation of speed, it’s all too easy to find yourself traveling along much faster than you thought you were.

It’s also willing to go very fast when you want to. Audi say that the A6 3.0TFSI will run from 0 to 60 in 5.9 seconds, which is quick indeed, and we suspect somewhat conservative. The engine has plenty of power on tap for getting up to speed while merging on the highway or passing slower traffic on a rural road. All it takes is a push of the accelerator, the car does the rest, and very quickly. Pre-selecting the correct gear using the Tiptronic control hastens the process, allowing the engine to be operating in the meat of its power curve before applying full power, which results in blisteringly
quick response. Passing multiple cars, trucks, none of it is any kind of worry with this car.

The Tiptronic transmission is unfailingly smooth as well, which quick and crisp shifts. The control unit will dynamically alter shifting points throughout the rev band as it adapts to the driver’s style, something we liked, but we also found that we preferred keeping the transmission in Tiptronic mode, to have full command over the engine. Since our car had the optional 3 spoke sport steering wheel with the shifter paddles, we found ourselves shifting manually, even occasionally overriding the selected ratio while in D.

When it comes time to stop, the A6 doesn’t disappoint either. While not necessarily overkill, the brakes are certainly never overwhelmed in daily driving, even spirited driving. The A6 is a fairly heavy car, at 4123 lbs (though not all that heavy considering it’s size and appointments) so we’d expect that repeated heavy use of the brakes might begin to tax them after a while. But in reality, that’s not the primary intent of this car, and even under very heavy braking, we experienced zero fade or pedal softness. Part of the Anti Lock system is Brake Assist, which can actually interpret what it feels to be a “panic” situation, and indeed apply more brake pressure than the driver is applying, all the while monitoring for and preventing lockup, to prevent a collision. In our driving, we never experienced any kind of intervention from the system, but we didn’t ever feel like we were in a panic situation, so it’s hard to tell if it will kick in under normal heavy braking.

The A6 3.0TFSI is truly a magnificent car for the driving enthusiast who happens to need a bit more space, be it for family, or things, but refuses to sacrifice performance and safety. The only problem we had with it is we don’t get to keep it forever. I’d love to have one in my garage, preferrably the Avant version. Even more room, more practical and best of all, it’s the best kind of car for stealthy driving.

The A6 is a supremely comfortable car for any length trip. The cabin is very
quiet, wind and tire noise is very well isolated. Miles are gobbled up effortlessly, and you arrive at your destination with no fatigue. Even with the sports suspension the ride quality is excellent. Big bumps are gobbled up with no drama and no lingering body movements. Some larger cars like the A6 tend

* 2011 Audi A8L 4.2

They say beauty is only skin deep, and in many cases that’s true. However true though, we recently found an exception to that rule – The Audi A8L. This is a car that’s decidedly nicer to be in, than out. Not because the all aluminum A8L is a minger mind you, rather, it’s because the interior of this car is flat out jaw-droppingly spectacular. From the leather covered dashboard to the supremely comfortable steering wheel to the heated and cooled and seemingly infinitely adjustable massaging seats (more on these later) to the user selectable interior lighting color scheme, to the (optional) Rear Seat Entertainment system, to the power sunshades, to the built in refrigerator, the A8L is one thoroughly thought out luxury automobile.

What makes the Audi A8L so good though is less about how it coddles its passengers, which it does ridiculously well, but how well it coddles its driver. Hidden below the luxury bits and unbelievably clever infotainment systems lies an incredibly well designed and built sports sedan. Yes, it’s very big, but once you get past the extra width and length, you realize that it doesn’t drive like a big car.

For starters, the A8L has the credentials to hang with sports cars. Having 375 horses available from the 4.2 liter FSI direct injection V8, mated to 8 closely matched ratios in the Tiptronic transmission, the A8L leaps off the line and runs out to 60mph in around 5 seconds, and it will continue on to an electronic limit of 130mph. With dynamic ride control and the optional sports rear differential, it handles like a sports car too. The levels of grip that the A8L can achieve are remarkable to say the least. This is great when no passengers are present, and the driver happens upon a twisty road
that needs to be conquered. Such antics are truly enjoyable in the A8L; it doesn’t feel like a fish out of water when being pushed hard. Body roll is minimal, squat and dive are essentially non existent thanks to the self adjusting air suspension. Merging into traffic or onto highways is drama free, unless of course too much power is called for, in which case, the excellent brakes get called into use.

On the highway, with the Dynamic Ride Control in Auto or Comfort, the ride is unbelievably smooth and comfortable. Even with the snow tires our test car was fitted with, the car was so quiet at 80mph that we could hear a watch tick. Granted, at 80mph the V8 turns over at just 2000 rpm thanks to the long legs afforded by the 8 speed Tiptronic, further reducing the cabin noise. It’s so quiet that some testers mistook the sound of air emanating from the rear seat vents as wind noise.

Normally the best seat in the house in an Audi is the left front, but when equipped with the Executive Back Seat, the best seat in the house of the A8L is unquestionably the right rear. We took one for the team as it were, and spent some time in the spacious back seat of the A8L, while others drove. When the front passenger seat is unoccupied, that seat can be sent away, tipped forward, and replaced by a convenient footrest. Meanwhile, the back seat slides forwards and reclines to match the footrest. Add heating and cooling, and massage feature, DVD video, and suddenly the lack of a steering wheel isn’t a problem.

Clearly the Executive Back Seat option was a huge draw to this particular car. It’s also not inexpensive. One could buy an entry level Korean car for what the option costs, but no matter. It’s an amazingly well thought out system, which is capable of presenting media from multiple sources – the glovebox mounted 6 disc CD/DVD changer, the rear mounted single CD/DVD player and SD cards, the Jukebox, AMI from ipod, or good old am/fm and satellite radio. Add to that the ability to run the Sat Nav system and either check in on the current trip status, or, create or modify the trip and send to the front MMI system (the rear seat system is it’s own complete MMI system, which is capable of interacting with the front seat MMI) for the driver to follow.

The best part of it all; each back seat position has its own 10.6 inch electronically adjustable LCD screen, and each passenger can watch/listen to their own media via either wired or wireless headset, OR, played through the car’s sound system. It is an unbelievably good system. We didn’t specifically try, but we think we spent more time in the back seat just trying to test all of the features of the system than we did driving it, and we drove it a lot. Did we mention that it has a refrigerator between the seat backs? It does, and we tested it. It keeps drinks very cold.

As good as the back seat entertainment is, for car nuts, the place to be is the driver’s seat. With 22 adjustments, multiple massage settings, 3 heat and 3 cooling modes which amazingly can be used simultaneously, this is one awesome seat. Other than not being able to watch video while underway, it has all of the good stuff that the back seat passengers have, plus a steering wheel and pedals. Depress the brake pedal, press the standard equipment keyless start button, and the car comes to life. This sequence is quite busy actually.

The power adjusted steering wheel assumes its pre-set position. The seats recall their memories. The main dashboard mounted MMI screen flips out, and when equipped, the tweeters for the phenomenally good 1400 watt 19 speaker Bang and Oulfsen audio system rise out of the dashboard. When the engine fires, it settles to a very smooth and quiet idle. The instrument cluster displays all of the pertinent information about the car’s status; with clever LED strips for the fuel and engine coolant gauges (instead of pointer needles), as well as the tachometer’s redline.

The D4 A8 brought us a new innovation from Audi, which is a fully electronic transmission selector. The lever is very low, and wide, with a soft leather covering, and is actually designed to be used as a wrist rest while manipulating the MMI system. After pressing the side button in the usual fashion, the selector can be used in 2 ways – either a tug through tactile detents to D directly, or, by “toggling” through R and N to D or S. Either method has the same ultimate result, though one does need to look at the dash to really know what gear the transmission is actually in, because the lever always returns to its resting position as soon as it’s released. One other interesting thing about this selector, there is no Tiptronic control mode.

Instead, manual mode is engaged by either tugging on one of the steering wheel mounted paddles, or, by depressing a button on the steering wheel. The former results in a temporary engagement of manual mode, the latter will stay in manual mode till the button is pressed again, or the selector lever is toggled backwards for D or S mode. The only negative to the system that we encountered was due to personal driving style. On the highway, with cruise control active, some of our testers liked to pull their feet back away from the pedals, which caused the right leg to brush the selector’s side button, which prompted the multifunction display on the dash to light up indicating the transmission mode.

The more time we spent with the A8L, the more we became spoiled by all of the little things it does. From the aforementioned keyless entry and start, power trunk lid, auto headlights and wipers, self closing doors, Bluetooth phone connection, power rear sun shades on both the rear window, and the back door side windows, all of which can be operated from the drivers seat and the back seats, dual front seat arm rests, reversing camera and parking radar sensors, and on and on. It’s not that the A8L makes drivers lazy, but it does so much for the driver, all that’s left for the driver to do is drive the car.

The navigation system adds to the ease of operation as well. Entering your destination is easier than ever. Audi installed a touch pad to the MMI system, which can be used for several functions within the NAV system. Firstly, while entering a destination, the user simply “writes” the letter with a finger. The system is amazingly good at translating gibberish barely legible letters into actual letters. As more letters are entered, the list can be selected and the destination entered. As if that wasn’t easy enough, the A8 also has voice recognition capabilities for entering addresses. The only drawback to using voice recognition is the system is a little sluggish as it prompts the user for input. But it’s very good at recognizing spoken words, and while underway, is quite possibly the easiest way to enter new addresses. The touch pad and voice recognition can also be used for placing phone calls with a Bluetooth connected phone.

With new levels of clarity in information conveyance, the latest Audi Nav system is truly remarkable. The new 3D map displays in more of a birds eye view, as opposed to directly above, which makes figuring out tricky intersections easier. Audi engineers went one step further with this, adding an exact representation of the intersection to the instrument cluster display. We found some really complex interchanges to test this out on, and it works incredibly well. Add to all of this the real time traffic updates, as well as the ability for the system to advise of locations for services such as restaurants and fuel stations (and when you run low on fuel, the system offers to find a fuel station for you) and so on, the system is incredibly useful and accurate.

As one might expect of a car that’s nearly 18 feet long, the interior is very spacious. With 121 cubic feet of interior room and only 4 seats (the rear seat entertainment console does not fold up is it does in the short wheelbase version), it’s quite roomy. Large bodies can fit with ample room between elbows, thanks to the broad center console. Leg room in back is tremendous, nearly equal to the front seats. Rear headroom is excellent, though not quite as generous in the front seats, but it’s not at all confining.

As if all of the aforementioned isn’t enough, the A8L offers even more. Full LED illumination throughout the car for one. There is not a single incandescent or halogen bulb anywhere in the A8L. The headlights are fully LED, and they are very good.

It’s pretty obvious that Audi engineers wanted to flex their creative and technological muscle, and without any hesitation, we say they nailed this one. They made a great looking, great driving, comfortable safe and all weather secure luxury executive sedan that in our opinion has no equal.

* 2011 Audi Q5 2.0T

In this day of high fuel prices, common sense would dictate that larger and thirstier vehicles wouldn’t be in vogue, with buyers instead opting for
smaller frugal cars. While that holds true, we also feel that because of our busy lifestyles, and the need to bring people and things places, a larger vehicle is often required. We think we found a happy medium in the Q5 2.0T. As we mentioned in our last test of the Q5 3.2 , the Q5 is an excellently sized car for day to day use, with tons of room for passengers and cargo. It’s also very nice to drive, and comfortable on long hauls. The Q5 doesn’t mind sporty driving at all either.

We’ve always been big fans of Audi’s turbocharged 4 cylinder engines, and the latest 2.0 liter FSI direct fuel injected version is a sweetheart. In the Q5, it’s rated at 211hp and 253 lb/ft of torque, which is achieved at 1500 rpm. This small and efficient twin cam 4 valves per cylinder 4 pot engine makes more torque than its larger and thirstier 3.2 liter V6 sibling, which only manages to churn out 243 lb/ft at 3000 rpm.

What that means in day to day driving is much less drama originating from the engine bay. The Q5 accelerates with alacrity, with a nice firm push off the line, as its 8 speed Tiptronic gearbox advances through the tight ratios. When compared to the 3.2 FSI version, the 2.0T Q5 possesses a much more satisfying lower end push, which is appreciated from stop lights, while merging into traffic, climbing hills, and so on. Though the published numbers disagree (Audi says that the 3.2 runs from 0 to 60 in 6.7 seconds, the 2.0 in 7.1), the extra torque from the turbocharged 2.0 makes it feel quicker, at least at lower speeds.

At higher engine speeds though, the turbocharger begins to lose efficiency, and the torque numbers drop. This is felt as a slightly less than eager acceleration above 5,000 rpm. This engine just doesn’t have the strong pull at the top end that the 3.2 V6 has, but that’s ok. With 8 ratios to play with in the new 8 speed Tiptronic transmission, Audi engineers are able to set gear spacing closer, allowing for brisk acceleration, and at the same time, have a nice long overdrive to keep the engine at low revs on the highway for maximum efficiency, and quiet running. Truth be told, in 8th gear on the interstate, it’s often advantageous to shift down to 6th to get the engine speeds up for hills and passing. But given the chance to cruise
on a flat, 8th gear is just off idle for most of the time. It’s very quiet, very calm. The 2.0T has no problem pulling off idle of course, but the fuel economy does suffer considerably when you ask it to.

While the 3.2 FSI V6 engine is not exactly a gas guzzler, the 2.0T is better when it comes to fuel consumption. Whereas the V6 engine version is EPA rated at 18 city 23 highway, the 2.0TI is rated at 20 and 27. We averaged 25mpg in mixed driving, which included photo shoots, back road play, and highway driving, in the winter, where fuel economy generally suffers due to extra idling and cold temperatures enriching the fuel mixture. For a vehicle like the Q5, we found that to be most excellent honestly.

Watching the instrument cluster’s instant fuel economy readout was interesting to say the least. There were times when a light foot, and 6th gear was showing us better mileage than 8th gear and a heavier foot to maintain speed. We also found that leaving the selector in D resulted in better average fuel economy and smoother driving than using the Tiptronic gate. Around town though, we liked using Tiptronic for keeping the engine in its maximum torque range. Our test model was fairly basic when it came to options. It had no sunroof, no sat-nav, no power tailgate, none of the fancy things that are so nice to have, but aren’t 100% necessary. This kept the price WAY down. As tested, our Q5 cost under $39,000, which is amazing for what the basic car consists of. The base audio system is excellent. The interior is standard ultra high quality Audi. The dash, center console, and door panels are trimmed with wooden panels. The shifter knob and steering wheel are leather covered, as are the seats.

For whatever reason, our Q5 felt really light and nimble, and fun to drive. For a tall vehicle, cornering was relatively flat. This is a car that can be pushed a lot harder than seems obvious at first. Because of the great torque from the 2.0T, the Q5 pulls through the corner very well. Body roll is kept well in check too, and there is decent feel through the wheel. There were times when we were wishing for slightly softer spring rates from the suspension, such as on badly frost heaved roads. The ride was borderline firm at times. It’s just not what we would describe as plush, by any means.

It absorbs big bumps and expansion joints well enough, but for whatever reason, it didn’t like frost heaves. Perhaps it’s due to the short wheelbase; or perhaps the cold weather made the oil in the shock absorbers more viscous and therefore increased the rates of damping. It wouldn’t be a deal breaker for us, but we felt it was worth noting.

We also had the chance to drive the Q5 in some snow, which while not at all uncommon for our editors; we would mention that the car we drove was not fitted with snow tires. Nevertheless, the Q5 did extremely well negotiating some tough conditions with its “all season” tires. Thanks to Audi’s excellent ESP and traction control, what could have been hair raising moments were completely controlled in the Q5. It’s times like those where the true nature of the car comes to the surface. The Q5 is a very stable platform, and it instills genuine confidence to its driver and passengers at all times. If you do manage to over-do it, the car works very hard to pull you back in from the brink of disaster, a fact that was hammered home nicely while we were busy forgetting that the car didn’t have snow tires installed, and took a corner a bit too fast.

If someone demanded that we were to choose between the Q5 with the 2.0T and the 3.2, it would be a hard choice indeed. Both are wonderful cars, and have much to offer. We did leave the test with the impression that the 2.0T had a really great feel thanks to its abundant torque, which didn’t require high revs or heavy foot to summon. It’s perhaps a little louder than the V6 engine, but the Q5 has enough sound deadening where it’s really not an issue.

In terms of all out maximum performance, it’s a tough call. The 2.0T can do everything the 3.2 can do; it just costs a bit less. Tough call, but I think we’d go for the 2.0T.

* Audi Q7 4.2 TDI

The Q7 4.2 TDI represents the current flagship of the Audi Q7 model offering both from a performance and pricing perspective. Unfortunately it will not be offered for sale in the United States any time soon, with Audi opting instead to focus solely on the 3.0-liter TDI which can theoretically be used ubiquitously across the entire Audi lineup. The Q7 4.2 TDI will be aimed at very high end European buyers who appreciate the smart fuel economy to power ratio of a diesel combined with this Q7’s stealthy performance.

Driving impressions

Our first and lasting impression of the Q7 4.2 TDI was that it was a vehicle purpose-built for the autobahn. Outwardly it doesn’t look any different from other Q7’s, so one would not being driving it for the sheer impression it makes from exterior. Behind the wheel it handles on par with the rest of the Q7 lineup, meaning very car-like in its approach albeit with a higher stance. It is only when the driver presses on the accelerator that the Q7 4.2 TDI sets itself apart. This vehicle is easily summarized as being relatively high performance with much, much better than ordinary fuel economy.

Interior

Our test vehicle was loaded with all of Audi’s most recent goodies, including Audi lane assist, adaptive cruise control, side assist and deluxe climate control. The interior was otherwise identical with the rest of the Q7 lineup – which was generally fine by us. We contend that Audi continues to maintain some of the finest interiors in the entire automotive industry, and particularly appreciate how Audi did not try to make the Q7 into a truck-like interior.

Performance

Most people realize that diesel powerplants are inherently big on torque, and Audi’s 4.2-liter TDI is no exception. A staggering 561 pound-feet of torque is available very low in the rpm band (from 1800-2500 rpms). This available torque helps get the Q7 4.2 TDI moving quickly, even effortlessly. Once moving the vehicle feels as if it offers never-ending power at essentially
any speed. Interestingly, it does not necessarily feel fast – something we attribute to the size and stance of the car. The only way the driver knows that they are tapping into rarified performance is by watching the speedo make its quick ascent.

Performance is of course not just about acceleration, but also a measure of how the car handles itself at speed. This is where the Q7 4.2 TDI really shines. It is definitely one of Audi’s best luxo-cruiser vehicles ever because it is comfortable, capable and very polite even at excessive speeds. The literature says that top speed is electronically governed at 240 km/h (or about 145 mph), but we routinely went closer to 250 km/h screaming down the autobahn outside of Munich. All the while the interior remained oh-so-quiet, allowing a very normal conversation if one dared to use brainpower for speech rather than concentrating only on driving duties. Stopping comfort is provided by the oversized 355mm, 6-cylinder front brakes and 358mm rear brakes since it is no trivial feat to quickly slow from 150 mph to more normal highway speeds.

Styling

The styling of the Q7 4.2 TDI was one of our biggest disappointments. With so much capable performance wrapped into the vehicle we would have liked to have seen some exterior differentiation offered as well. The Q7 is a very masculine looking vehicle in its own right, so perhaps Audi decided that no further enhancements were warranted. Another possibility is that Audi indeed embraces the stealthy performance concept and prefers to keep the Q7 4.2 TDI burly under the hood and mild-mannered everywhere else.

The Q7 4.2 TDI is a bit of a novelty. We had never hurtled at 145+ mph down any stretch of road in a vehicle resembling an SUV until we got behind the wheel of this one. That said we can understand Audi of America’s decision behind not offering it in the US market. For one thing there is no highway here where it would be legal to drive 145 mph or anywhere even remotely close. For another, the cost of the product makes it an extremely niche offering. * Audi A7 3.0TFSI

Dude, that’s the most beautiful car I’ve ever seen! Do you mind if I take a photo of it?” While my new friend was busy filling up his memory card, I stood back and admired this gorgeous car as well. While not the first A7 I’d ever seen in the metal, it was the first one which was painted an actual color instead of the ever popular Ice Silver, Savannah Beige, Ibis White, etc. With our A7 Prestige S line exterior swathed in Garnet Red, the A7’s crisp lines popped off of the body, and darker color enhanced some of the subtle design elements. It really looked great in Garnet, and as it turned out, this would not be the last time people went out of their way to photograph this car. People are irresistably drawn to the A7 by it’s looks, and we can’t blame them. Drama and sensational design are somewhat of a new phenomenon at Audi, where the modus operandi used to be more about understated yet functional luxury, safety, all weather surefootedness. That seemingly ended when the absolutely gorgeous A5/S5 pair were launched in 2007, and now with this new A7, it’s dead, buried and forgotten entirely. The A7 is the car that random strangers want to have photos of.

We feel that the A7 is the most deliberately beautiful large car Audi have produced in their rich history. There are design elements which have no purpose other than beauty, such as the gentle flowing line on the dashboard trim, and the way the door handle surrounds match the angular cut to the rear windows. The gentle slope of the roof, the interesting and proportionally perfect rear fenders, the beautifully designed hips all contribute to the overall design. There is little question that people will shop and purchase this car based on looks alone, which is understandable, but is also a shame because the A7’s stunning good looks are only a small portion of what makes the A7 the car to own for 2012. The A7 is an absolute blast to drive. It has the uncanny ability to coddle while cruising, and throw down and tear up the asphalt when a fun romp up a twisty road is called for. There is so much good going on under the beautifully formed skin of the A7; you owe it to yourself to have a closer look.

Beneath the beautifully sculpted aluminum hood Audi fits a 310hp (325lb/ft) version of their solid 3 liter supercharged and direct fuel injected 4 valves per cylinder gasoline V6 engine in the A7, mated to their 8 speed automatic transmission. We won’t be getting the 7 speed dual clutch S-Tronic transmission in the USA as far as we’ve been told, and that’s really OK. The 8 speed Tiptronic transmission is very good, and is much smoother in casual driving than the S-tronic, and it shifts just as fast (we’ve driven both). Audi tells us that the TDI will be following in year 2 for the A7, though we’ve driven it in Europe with the 3.0TDI, and it’s quite simply amazing.

Torque junkies, you want the 3.0TDI. Connecting the front and rear axles is an all new Crown Gear center differential. This unit is more compact (lighter) and more efficient than the previous Torsen center differentials, and allows for more rearward bias than before. It’s still 100% mechanical, but uses a different arrangement of crown and pinion gears, with the addition of mechanically activated clutchpacks to do it’s thing. We’ve driven the A7 on ice and snow, and can verify that the crown gear center diff works exceedingly well.

Off the line, the A7 launches firmly, certainly fast enough to excite your passengers and others around you. In Tiptronic mode, drivers will want to make quick work with the shifter lever to keep up with the relatively short ratios and quick revving engine. Audi says the A7 3.0TFSI will run to 60 in 5.4 seconds. We didn’t put a watch to it, but that seems about right, if maybe a little pessimistic. This car is really quick off the line, and the throttle to smile relationship is very close. Merging onto the highway, passing on 2 lane roads, and just general hooning are easy, and hugely fun.

On the highway, the A7 has more than ample power for cruising at legal and beyond speeds. Because of the smooth and quiet nature of the car, it’s all too easy to find yourself clicking along at speeds that the nice man in the Smokey the bear hat might disapprove of. You’ve been warned. And thanks to the longs legs of the 8 speed transmission, at 75, the engine is just barely ticking along above idle, completely silently. If at any point a quick burst of speed is called for, it’s just a quick tip of the foot away. With the supercharger requiring no time to build up boost, the 3.0TFSI responds instantly, as does the transmission and the car builds speed with alarming ease.

The 3.0TFSI is an incredibly flexible engine. Trundling around slow streets, it’s silent, and smooth. The supercharger is completely inaudible in the A7. When the opportunity comes to open the taps, the engine is force fed a large helping of air and fuel, and the car lunges forward rapidly. Because the 8 speed transmission’s ratios are so close, on hard launches we found it best to leave the transmission in D (or S) and let it manage the shifting itself, which it does incredibly well in most cases. On winding roads where the transmission would want to shift up for fuel economy, we chose to use the Tiptronic mode to keep the engine in the meat of its power, and to keep the transmission from needing to shift down every time we wanted more go.

The A7 is surprisingly nimble on tight roads, mostly thanks to perfect suspension tuning (never too firm, never too soft), excellent brakes, and abundant torque. With the stability control left on, the A7 will take the normal predictable stance, where the tendency is for gentile under steer. Our preference with these cars is always to turn the stability control off, which lets the car rotate a bit more than it is allowed to by the ESP. Thanks to the crown gear center differential, which is normally split 60/40 (rear/front), but can go to 85/70 when needed, the cars feel a lot more lively. Also new for the A7 is what Audi calls Torque Vectoring, which uses the car’s ESP and ABS system to monitor for tire slippage at the inside of the turn, then using small applications of brakes to divert the torque across the differential to the outside of the turn. This ends up being similar in practice to Audi’s optional sports differential, which uses clutch packs and hydraulics to accomplish the task. The end result of either system is, the car under steers much less, and feels much more rear drive biased, and supremely good handling characteristics.

With either system, the grip levels the A7 can achieve are substantial, especially for a large car. Certainly the 19 inch wheels and summer tires help a lot in the grip levels. We took it to one of our favorite tight and twisty mountain roads, just to see what the A7 would be like in that environment. We were not disappointed in the least. Not only was the car hysterically fun to fling around these tight up and down hill turns, it completely masked the fact that weather has not been kind to this road, which has become quite rough over the years. The A7 was able to absorb these bumps, while maintaining it’s composure at all times, and all speeds.

Steering feel is very good considering the front suspension design and construction, which does isolate the tires from the car a bit, not to mention the variable ratio servotronic steering. With the standard Audi Drive select, drivers have the option of comfort or dynamic steering, and engine/transmission behaivor. When Dynamic mode is selected, the steering becomes heavier, and more direct feeling. Feedback is still very good though, and when the front tires begin to lose their touch with the pavement, it can be felt through the wheel, and the driver knows when to make adjustments. In this regard, the A7 truly is a driver’s car. It is a very driveable car, meaning, the driver is not just directing the car around bends.

The exhaust note is considerably muted in this application. Compared to the S4 or the S5 Cabriolet which share the 3.0TFSI, the A7 3.0TFSI has more of a deep murmur emitting from the exhaust. It’s our feeling that this mellow note is actually more in line with the luxury/sport nature of this car. We were never left feeling annoyed by any excessive engine noises from the A7, there is no drone, and no raspiness to speak of. This is a car that one can spend many hours driving and arrive completely relaxed, and in many cases, rejuvenated.

The supremely elegant design of the A7 continues into the cabin as well. We love the new 2 tier wrap around dash design, which takes its queues from the A8 while remaining true to its design. The A7 shares its basic dash layout with the also all new A6, though the A7 receives a sweeping trim piece which meets the passenger side vent, and unique door panels with the aforementioned door handle surrounds which mimic the dramatic upswept line of the rear quarter windows. The A7 interior is a decidedly luxurious place to be. All control surfaces are soft to the touch, even the knurled knobs for the MMI controls, and the aluminum trim on the gearshift.

After a bit of experimenting, we decided we liked the looks of the dash more when the MMI screen was kept in its stowed position, which is a single button push away if needed. The overall feel of the dash is that it is compact and sporty looking. The instruments are taken directly out of the A8, and they are simply awesome. The A7 also has the option for a heads up display, which functions incredibly well, but comes at the expense of the reduction in some of the aesthetic beauty of the interior – the pod which houses the projector unit for the HUD is a bit awkward looking to us compared to the elegant design of the instrument cluster cover.

The A7 is not only tremendously fun to drive, its fun just to sit in and play with. Aside from the standard keyless go, the A7 also is equipped with a 3G hotspot for mobile internet, which we found to be excellent, even in fringe areas. We were able to stream our favorite web radio show over an ipod touch, and then via Bluetooth, broadcast it back through the car’s Bose audio system.

It was an uber nerd moment we realize, but it’s another thing that makes the A7 the car to own for 2012. You can pair a Bluetooth audio player like the Ipod Touch (or Iphone, etc) to the A7, and play ANY audio via the car’s sound system (while simultaneously mating a Bluetooth phone separately). Sound quality is identical to plugging it in via the AMI. Also thanks to the 3G internet connection, the A7 is capable of overlaying Google Earth over the top of the SAT NAV maps, which is pretty cool, since it will show you EXACTLY what’s in the area around you. The maps update fast enough (obviously depending on the internet connection speed), and the MMI system scrolls the maps very smoothly as you drive along.

Other interesting bits of technology on the A7 are the lights. Our car had the Xenon Plus adaptive lights, and they were the best HID type lights we’ve seen so far. We were sure they were full LED till we did some digging. The headlights are amazingly bright and well focused, both low and high beams. They change their aim as the steering wheel is turned, and they dip extra low when the fog light button is pushed. The taillights are LEDs, with a long thin strip atop the hatch as the high mount brake light. Both the front marker LEDS and the tail lights have a distinctive swoop pattern. As far as techno-gadgetry goes, the A7 has it all, and it all works very well indeed.

Inside, the A7 has ambient lighting throughout. Each door panel has a small strip light, as do the footwells, door sills, and overhead. There are LEDs in places you’d never expect to see one.

The seats are beautifully rounded at the tops, and are very comfortable. Our tester was fitted with the heated and ventilated seats, which added to the comfort. This particular car did not have the multi-adjustable seats, which meant no extra thigh support, but that was OK, as we find the seat bottoms to be long enough for the most part. The headrests are nicely adjustable as well, both vertically, and horizontally. Our car also had the 4 zone climate control, a plus for back seat passengers.

We found the back seats to be comfortable, but for taller passengers, headroom was a bit of a compromise. Not that there wasn’t enough, rather, back seat headroom is created by pushing the headliner high up to the roof, which creates a big hump in the headliner just aft of where the sunroof mechanism is. Because of that hump, tall back seat riders feel as if their head is in a hole somewhat. This is a minor gripe, but it’s there. Also know, the back seat is for 2 only. The center piece is a plastic tray of sorts, much like the one in the S5 coupe, which is required because the A7 has no center seatbelt.

Because of the enormous rear hatch, loading the A7’s cargo area is very easy. The trunk is very deep, if somewhat narrow. We could easily fit our largest suitcase, and our golf clubs were gobbled up drama free. If the cargo area covers were removed (easily done with a tug of 2 rubber knobs) the capacity is all that much more. The back seat is a 60/40 folding arrangement (with a generous pass through), perfect for skis, or other long items, while still retaining room for passengers. This is good, because Audi say there will be no A6 Avant for 2012, which means the A7 will have to fit that position for some shoppers. The car is not without faults unfortunately. The rear window is almost always full of the reflection from the white covering of the rear parcel shelf. We removed this cover and drove around, and found the view out the back window to be substantially better, thanks to the elimination of the white glare.

The other issue we had was also reflection related, this time it was that the instrument cluster was reflected high up on the windshield at night. We’ve never seen this on any other Audi that we can recall, and it seems like if Audi extended the instrument cluster cover even slightly, that would eliminate this reflection. And that’s it. 2 little reflections on the inside glass are the only bad thing we found about this car.

* Audi R8 5.2 V10 FSI

Much has been written about the Audi R8 5.2 V10FSI, but it’s truly impossible to fully appreciate this car until you drive, or at the very least, go for a ride in one. We found the R8 5.2 V10 to be unlike any other car we’ve ever driven, and not necessarily for the obvious reasons. Like every other Audi, this car is useful for day to day driving. The seats are comfortable, and supportive. The cabin has ample room for 2 adults, even those of exaggerated size, provided neither intends to bring a lot of things with them as storage is severely restricted. Outward visibility is excellent for a car of this nature, though the rear 3/4 views are impeded by the very thick C pillars and miniscule windows aft of the doors. Thankfully our car was equipped with Audi’s (standard on the 5.2) excellent rear view camera and parking sensors, otherwise a spotter would have been required for tight parking and garage doors.

Unlike Audis of the past, this car is a little brash, a little (ok, a lot) extroverted, practically screaming “look at me”. Having only 2 seats and a small trunk, it’s not the most incredibly practical family car in the world.

Regardless, the R8 is a true Audi. It’s luxurious in every way. Attention to detail throughout the car is unsurpassed. Every R8 is hand built by Quattro GmbH (the specialty arm of Audi, who previously built the RS6, RS4, and all aluminum Audi Space Frame vehicles) and as beautifully as “regular” Audis are built, this car is, dare we say, perfect. The interior is bathed in perfection. From softly padded leather to smooth, glossy (and not inexpensive!) optional carbon fiber trim, knurled aluminum, or richly textured plastic, it’s a rich environment. Occupants are kept comfortable with great heat, A/C, heated seats and mirrors, it’s even got a rear demist.
The flat bottom steering wheel makes entry and exit easy for such a low car. It can be had with an excellent Bang and Olufsen sound system and CD changer, satellite radio; it’s even got an AUX input for an MP3 in the center console cubby. It’s quite comfortable on long trips, or just around the block. Clearly Audi intended owners of this car to DRIVE it.

And what a car it is to drive. The all aluminum quad cam FSI direct injection 5.2 liter V10 shrieks out 525bhp at 8000 rpm. It revs incredibly quickly (think race car) and it feels like it wouldn’t mind reaching around to the 10 mark on the tachometer, if only the engine management would let it. This engine produces the most marvelous sounds we’ve ever heard. Driven casually, its quiet, and calm. Even at part throttle, if allowed to rev a little, the engine is mellow, and smooth. However, put the pedal on the floor, and a vacuum actuator opens a valve in the exhaust, causing the engine note to change character. Gone is the relatively quiet and calm sounding engine, replaced with a low growl. As the revs climb, the note turns more angry, and at 8000rpm, it’s screaming like a Formula 1 car. It’s addictive to say the least.

This awesome engine works incredibly well to propel the R8. To call it quick does not do it justice. It’s downright fast. Not in a violent or scary way, but in an eyeball flattening, cheek flapping, time bending way. In the lower gears, full throttle results in what feels like the hand of God reaching down, and giving the car a firm push. Overtaking slower cars is completely effortless, in any gear. Audi reports 0-60 in 3.7 seconds with a top speed of 196, and we have no doubt as to the validity of either of those numbers. Launching from a standstill was a no-drama affair, even at full throttle, thanks to the very responsive quattro all wheel drive system (which has a rearward bias ranging from 85% to 70%). The 6 speed manual has a beautiful gated shifter, which has a nicely weighted feel. Normally we find that gated shifters are difficult to acclimate to, but in the R8 it was easy and fun to row through the gears.

The clutch is very light and easy to use considering what it’s tasked with. Since the car we drove was fitted with a MASSIVE set of snow tires, we did detect a fair bit of tail wagging under very hard acceleration, but again it was never alarming. It was however somewhat easy to excite the traction control, which steps in and cuts the throttle to regain its grip on reality. Even with the ASR turned off, the car was nearly impossible to upset.

A car with massive power that can’t manage a corner is no fun, and luckily the R8 5.2 devours corners with a voracious appetite. The R8 comes standard with Audi’s magnetic ride system, with continuously adjustable magnetorheological damping, along with “Sport” and “Normal” modes for further driver control. Even in the non-sport mode setting, cornering is flat, and predictable. It doesn’t mind being driven casually, but it craves being driven hard. Giving the “sport” mode button a push results in instantaneous firming of the dampers, and incredibly tight handling, but it’s almost unbearable on bumpy roads. In “normal” mode, it’s more comfortable than many “lesser” cars. The brakes are massive and powerful. Brake late, trail the throttle to set the car up, find the apex and leap on the throttle, the car hurls itself through and on to the next corner. The only thing that the R8 FSI has against it is its weight. It’s not a lightweight for sure, at 3715lbs. It doesn’t drive heavy, but at the same time, it certainly doesn’t feel like an ultra light, but that’s ok with us. The luxury we mentioned earlier does add weight, and we feel it’s worth it. The R8 would not be the same car if it was stripped out to nothing. A great track day car, perhaps, but not a great every day car.

The R8 also has a completely enclosed flat bottom, with ground effect style aero tweaks at the front and rear. At speed the car feels glued to the road. At no point does it feel light or skittish, even in cross winds. It’s nice that Audi are able to accomplish this without gaudy wings (there is a very small pop-up spoiler at the rear) or door stop shapes.

As if being content with a luxurious interior isn’t enough for Audi, this car is jammed with technology. For instance, every single light in and on the car is an LEDs. The entire headlight array is entirely high intensity LED. They are incredibly bright, well focused and aimed. The high beams are perhaps a little soft given the capabilities of the car, but at realistic speeds, they are excellent. The R8 was the first Audi to wear the now ubiquitous LED Daylight Running Lights, and it wears them well. When this car appears in your mirrors, it’s got a menacing stare, practically demanding people to get out of its way. The 2010 R8 also gets Audi’s new 3D navigation system, with real time traffic monitoring service. This is an improvement over the older style navigation system in that it more accurately depicts intersections and interchanges.

The ABS and ASR systems are very good, with suitably high thresholds for such a high performance car. It’s also got a hill holder feature, which holds the brakes while you start on a hill, so you don’t need to use the hand brake. It’s fully automatic too. Foot on clutch, release the brake, and you have a few seconds of braking while you engage the clutch. We found out by accident that it had this feature, while we were experimenting on an icy hill.

The thing about the R8 5.2 FSI, it never lets you forget that it’s a supercar. This car attracts more attention than a supermodel at a fraternity party. The body is beautiful, with its sculpted doors and sideblades, sexy curves, low stance, and aggressive angles. The 19 inch 5.2 V10 wheels are dramatic. They give the car a very unique look and contribute nicely to the supercar effect. We received more smiles and waves and thumbs-ups (even from some local police officers we encountered) and photos snapped of the car than we’ve ever experienced driving any other car. Everyone wanted to know more about this car. Our favorite part of what we came to refer to as the “fishbowl effect” was the massive positive reaction from every other Audi driver we encountered. Being an Audi owner is already a cool thing, and seeing the ultimate Audi on the road is a pretty awesome thing as it turns out.

What makes the R8 5.2 V10 so great is what it isn’t. It isn’t difficult to drive. It isn’t uncomfortable, or fussy, or only good to drive once in a while or anything else that supercars are supposed to be. It’s a great all around car, which happens to be blazingly fast and fun to drive.

It’s the Audi of supercars.

Comparison of Audi, BMW and Mercedes automobiles
Audi, BMW and Mercedes are the three major luxury automobile brands in India. Arguments can be made on who makes better cars. There is little differentiating the three brands and each have their own strengths and weaknesses. Compared below is all the flagship cars from each model range of the respected brands.

* Audi A4 vs BMW 3 series vs Mercedes C Class
SPECIFICATIONS:|
| AUDI A4 1.8T| BMW 320i EXECUTIVE| MERCEDES-BENZ C200K| Price (Rs):| 31,97,374| 30,25,518| 27,38,175|
|
Body:| Steel, 4 doors, 5 seats| Steel, 4 doors, 5 seats| Steel, 4 doors, 5 seats| Engine:| In-line 4cyl, dohc, 16v, DI, turbo| In-line 4cyl, dohc, 16v| In-line 4cyl, dohc, 16v, supercharger| Layout:| Front engine (north-south), front drive| Front engine (north-south), rear drive| Front engine (north-south), rear drive| Capacity:| 1.798 litres| 1.995 litres| 1.796 litres|

Power:| 118kW @ 4500-6200rpm| 115kW @ 6400rpm| 135kW @ 5500rpm| Torque:| 250Nm @ 1500-4500rpm| 200Nm @ 3600rpm| 250Nm @ 2800-5000rpm| Transmission:| CVT| 6-speed automatic| 5-speed automatic| Dimensions (L/W/H):| 4703/1826/1427mm| 4520/1817/1421mm| 4581/1770/1444mm| Wheelbase:| 2808mm| 2760mm| 2760mm|

Weight:| 1410kg| 1390kg| 1490kg|
Fuel/capacity:| 95 octane/65 litres| 91-98 octane/63 litres| 95-98 octane/66 litres| Fuel consumption:| 10.0L/100km(test average)| 9.2L/100km (test average)| 10.2L/100km (test average)| Boot capacity:| 480 litres| 460 litres| 475 litres|

Warranty:| 3 years/Unlimited km| 3 years/Unlimited km| 3 years/Unlimited km| 0-100km/h| 8.2 sec| 10.4 sec| 8.5 sec|
NCAP rating| ★★★★★ (Euro)| ★★★★★ (Euro)| ★★★★★ (Euro)| |
For:| Build quality; impressive package; quietness; refinement| Good fuel
economy; balanced handling; proper handbrake| Good looks inside and out; performance; self-assured handling| Against:| Sharp take-off; snatchy low-speed; electric park brake| Dull/heavy steering; noticeably less performance than rivals; interior| Rear passenger entry/exit; low-speed engine noise; cloth kick panels| | | | |

* Audi A6 vs BMW 5 series vs Mercedes E Class
Audi A6 3.2 FSI| BMW 5 Series 535i| Mercedes Benz E350|

Avg. Ex-Showroom Price | Rs. 45,00,000| Rs. 58,52,633| Rs. 50,55,641| Features| | | |
Air Conditioner | | | |
Power Windows | | | |
Power Steering| | | |
Anti-Lock Braking System| | | |
Air-Bags (Driver | Passenger)| | | | | | |
Leather Seats| | | |
CD Player| | | |
Specs| Audi A6 3.2 FSI quattro| BMW 5-Series 535i Sedan 3.0| Mercedes-Benz E-Class E350 CDI Avantgarde| Overall Length (mm)| 4916| 4899| 4868|
Overall Width (mm)| 1855| 1860| 1854|
Overall Height (mm)| 1459| 1464| 1471|
Kerb Weight (kg)| 1640| | 1825|
Mileage Overall (km/liter)| 6.1| | |
Seating Capacity (person)| 5| 5| 5|
No of Doors| 4| 4| 4|
Displacement (cc)| 3132| 2996| 2987|
Power (PS@rpm)| 256@6500| 306@5800| 231@3800|
Torque ( Nm@rpm)| 330@3250| 400@1200| 540@1600|
Transmission Type| Automatic| Automatic| Automatic|
Gears| 6| 8| 7|
Minimum Turning Radius (meter)| 5.9| | 5.6|
Tyres| 225/50 R 17| 245/45 R 18,| 245/45 R 17|

* Audi A8 vs Mercedes S Class vs BMW 7 series
Audi A8 L
3.0 TDI quattro| BMW 7-Series 740Li Sedan| Mercedes-Benz S-Class
350 L|

Avg. Ex-Showroom Price | Rs. 77,85,268| Rs. 87,16,380| Rs. 85,48,306| Features| | | |
Air Conditioner | | | |
Power Windows | | | |
Power Steering| | | |
Anti-Lock Braking System| | | |
Air-Bags (Driver | Passenger)| | | | | | |
Leather Seats| | | |
CD Player| | | |
Specs| Audi A8 L 3.0 TDI quattro| BMW 7-Series 740Li Sedan| Mercedes-Benz S-Class 350 L| Overall Length (mm)| 5267| 5179| 5096|
Overall Width (mm)| 1949| 1902| 1871|
Overall Height (mm)| 1471| 1484| 1479|
Kerb Weight (kg)| | 1935| 1925|
Mileage Overall (km/liter)| | 6| |
Seating Capacity (person)| 5| 4| 5|
No of Doors| 4| 4| 4|
Displacement (cc)| 2967| 4000| 3498|
Power (PS@rpm)| 250@4000| 306@6300| 370@6300|
Torque ( Nm@rpm)| 550@1500| 390@3500| 345@4500|
Transmission Type| Automatic| Automatic| Automatic|
Gears| 8| 6| 7|
Minimum Turning Radius (meter)| 6.2| | 6.2|
Tyres| 235/55 R18| 245/50 R18| 235/55 R 17 W|

* Audi Q5 vs BMW X3
|
AudiQ5
3.0 TDI | BMW X3xDrive 20d|

Avg. Ex-Showroom Price | Rs. 46,96,911| Rs. 41,22,266| |

|
Air Conditioner | | |
Power Windows | | |
Power Steering| | |
Anti-Lock Braking System| | |
Air-Bags (Driver | Passenger)| | | | |
Leather Seats| | |
CD Player| | |
Specs| Audi Q5 3.0 TDI quattro| BMW X3 xDrive 20d|
Overall Length (mm)| 4628| 4569|
Overall Width (mm)| 1879| 1987|
Overall Height (mm)| 1651| 1674|
Kerb Weight (kg)| 1895| 1880|
Mileage Overall (km/liter)| 8.36| 10|
Seating Capacity (person)| 5| 5|
No of Doors| 5| 5|
Displacement (cc)| 2967| 1995|
Power (PS@rpm)| 240@4000| 178@4000|
Torque ( Nm@rpm)| 500@1500| 350@1750|
Transmission Type| Automatic| Automatic|
Gears| 7| 7|

* Audi Q7 vs BMW X5 vs Mercedes M Class
| Audi Q7
4.2 TDI quattro BMW X5
xDrive 50i| Mercedes-Benz M-Class ML 350 CDI|
Avg. Ex-Showroom Price | Rs. 65,83,913| Rs. 72,11,186| Rs. 55,68,983|

Features| | | |
Air Conditioner | | | |
Power Windows | | | |
Power Steering| | | |
Anti-Lock Braking System| | | |
Air-Bags (Driver | Passenger)| | | | | | |
Leather Seats| | | -|
CD Player| | | |
Specs| Audi Q7 4.2 TDI quattro| BMW X5 xDrive 50i| Mercedes-Benz M-Class ML 350 CDI| Overall Length (mm)| 5086| 4857| 4781|
Overall Width (mm)| 1983| 1933| 1911|
Overall Height (mm)| 1737| 1776| 1774|
Kerb Weight (kg)| 2450| | 2135|
Mileage Overall (km/liter)| | | 8.2|
Seating Capacity (person)| 7| 5| 5|
No of Doors| 5| 5| 5|
Displacement (cc)| 4134| 4395| 2987|
Power (PS@rpm)| 340@4000| 407@5500| 234@3800|
Torque ( Nm@rpm)| 760@1750| 600@1750| 535@1600|
Transmission Type| Automatic| Automatic| Automatic|
Gears| 6| 8| |
Minimum Turning Radius (meter)| | | |
Tyres| 255/55 R 18| 255/50 R 19 | 275 / 55 R 19|

INDUSTRY ANALYSIS

Automobile industry in India

The Indian Automobile Industry is manufacturing over 11 million vehicles and exporting about 1.5 million every year. The dominant products of the industry are two wheelers with a market share of over 75% and passenger cars with a market share of about 16% Commercial vehicles and three wheelers share about 9% of the market between them. About 91% of the vehicles sold are used by households and only about 9% for commercial purposes. The industry has attained a turnover of more than USD 35 billion and provides direct and indirect employment to over 13 million people

The supply chain of this industry in India is very similar to the supply
chain of the automotive industry in Europe and America. This may present its own set of opportunities and threats. The orders of the industry arise from the bottom of the supply chain i. e., from the consumers and goes through the automakers and climbs up until the third tier suppliers. However the products, as channelled in every traditional automotive industry, flow from the top of the supply chain to reach the consumers. Interestingly, the level of trade exports in this sector in India has been medium and imports have been low. However, this is rapidly changing and both exports and imports are increasing. The demand determinants of the industry are factors like affordability, product innovation, infrastructure and price of fuel. Also, the basis of competition in the sector is high and increasing, and its life cycle stage is growth. With a rapidly growing middle class, all the advantages of this sector in India are yet to be leveraged.

Note that, with a high cost of developing production facilities, limited accessibility to new technology and soaring competition, the barriers to enter the Indian Automotive sector are high. On the other hand, India has a well-developed tax structure. The power to levy taxes and duties is distributed among the three tiers of Government. The cost structure of the industry is fairly traditional, but the profitability of motor vehicle manufacturers has been rising over the past five years. Major players, like Tata Motors and Maruti Suzuki have material cost of about 80% but are recording profits after tax of about 6% to 11%.

The level of technology change in the Motor vehicle Industry has been high but, the rate of change in technology has been medium. Investment in the technology by the producers has been high. System-suppliers of integrated components and sub-systems have become the order of the day. However, further investment in new technologies will help the industry be more competitive. Over the past few years, the industry has been volatile. Currently, India’s increasing per capita disposable income which is expected to rise by 106% by 2015 and growth in exports is playing a major role in the rise and competitiveness of the industry. Tata Motors is leading the commercial vehicle segment with a market share of about 64%.Maruti Suzuki is leading the passenger vehicle segment with a market share of 46% Hyundai
Motor India and Mahindra and Mahindra are focusing expanding their footprint in the overseas market. Hero Honda Motors is occupying over 41% and sharing 26% of the two wheeler market in India with Bajaj Auto. Bajaj Auto in itself is occupying about 58% of the three wheeler market.

Consumers are very important of the survival of the Motor Vehicle manufacturing industry. In 2008-09, customer sentiment dropped, which burned on the augmentation in demand of cars. Steel is the major input used by manufacturers and the rise in price of steel is putting a cost pressure on manufacturers and cost is getting transferred to the end consumer. The price of oil and petrol affect the driving habits of consumers and the type of car they buy.

The key to success in the industry is to improve labour productivity, labour flexibility, and capital efficiency. Having quality manpower, infrastructure improvements, and raw material availability also play a major role. Access to latest and most efficient technology and techniques will bring competitive advantage to the major players. Utilising manufacturing plants to optimum level and understanding implications from the government policies are the essentials in the Automotive Industry of India.

Both, Industry and Indian Government are obligated to intervene the Indian Automotive industry. The Indian government should facilitate infrastructure creation, create favourable and predictable business environment, attract investment and promote research and development. The role of Industry will primarily be in designing and manufacturing products of world-class quality establishing cost competitiveness and improving productivity in labour and in capital. With a combined effort, the Indian Automotive industry will emerge as the destination of choice in the world for design and manufacturing of automobiles.

Market Size

The Indian Automotive Industry after de-licensing in July 1991 has grown at a spectacular rate on an average of 17% for last few years. The industry has
attained a turnover of USD 35.8 billion, (INR 165,000 crores) and an investment of USD 10.9 billion. The industry has provided direct and indirect employment to 13.1 million people. Automobile industry is currently contributing about 5% of the total GDP of India. India’s current GDP is about $ 1.4 trillion and is expected to grow to $ 3.75 trillion by 2020. The projected size in 2016 of the Indian automotive industry varies between $ 122 billion and $ 159 billion including USD 35 billion in exports. This translates into a contribution of 10% to 11% towards India’s GDP by 2016, which is more than double the current contribution.

Luxury Car Market in India

Luxury Car segmentation

* Compact executive car/entry-level luxury car

These are luxurious equivalents to mid-size and compact cars. Powerful four-, six- and even eight-cylinder engines are available but, rear seat room and trunk space are more reduced than in more common executive or luxury vehicles simply because of their smaller size and sport characteristics. Examples of compact premium cars / entry-level luxury cars: Audi A4

BMW 3 series
Mercedes C Class

* Executive car/mid-luxury car

An executive car or mid-luxury car is larger than a large family car/mid-size car and a compact executive car/entry-level luxury car. They are usually very roomy, powerful and luxurious, making them more expensive than “standard” saloons. This also refers to the largest hatchbacks within the similar length in this class.

Examples of executive cars/mid-luxury cars:
Audi A6
BMW 5 series
Mercedes E Class

* Full-size luxury car/Grand saloon
A full-size car is typically a four-door saloon(sedan). These are the most powerful saloons, with six, eight and twelve-cylinder engines and have more equipment than smaller models.

Examples of full-size cars:
Audi A8
BMW 7 Series
Mercedes S Class

* Sports car

This small-size vehicle class combines performance and handling. Sometimes inspired by racing vehicles, this class ranges from lightweight derivatives such the Lotus Elise and “average consumer” focused models such as the Mazda MX-5, to heavier and more powerful models such as the Dodge Viper.

Examples of sports cars:
Audi R8
BMW M5
Mercedes SL Series

Luxury Car market in India- an overview

The recent growth in the luxury car market in India is much more than mere market dynamics in a particular car segment. It is a reflection of the changing lifestyle of the affluent class in the country. In India, the luxury car segment (Average Price 25-30 Lakh) has been growing at an average rate of 20% or above during recent years; it seems to be least affected by the global financial crisis. During worst recession period when world was facing low market demand trends, Indian luxury car segment grew at 23% to 6,671 vehicles according to the Society of Indian Automobile

Manufacturers (SIAM) despite a 0.5% decline in passenger car. sales, to 11.04 lakh vehicles. But financial year ended March 2010 has shown growth of automotive sector up by 25% to 15.26 lakh vehicles. This indicates optimistic sign of recovery of sector. While the Indian auto industry is expected to grow at 17% to 19% on an average, sales of luxury and super-luxury cars are expected to grow exponentially.

Luxury car segment accounts only for 3-4% of total car sales in India. But what lures the international majors is the fact that this segment is growing at 25%-plus (2009 sales), much higher than 15-17% growth registered by the small passenger car segment over the past few years. This growth of luxury car sales is driven majorly by increased wealth-creation within average Indian population and the desire of individuals to join the millionaire-club by flaunting their wealth.

Growth of Indian economy has been faster than other emerging economies during recent times. Globally, India had the highest growth-rate (22.7%) of millionaire population during the year 2007. India added 23,000 millionaires from 2006 to 2007, taking total figure to around 123,000 millionaires; wealth as measured in US Dollars (Merrill Lynch Cap Gemini Report).However, during recession, the country noticed a decline of 31.6% in number of millionaires. But post-recession recovery was much faster compared to other economies. These numbers are expected to grow up to 1,40,000 by the year 2010. This robust growth in the number of millionaires in the country, being one of the highest globally, paves the way for further growth of the luxury car market.

In addition, the average age of an Indian millionaire has come down to 35-40 years from the earlier average of 50 years. An increasing number of young entrepreneurs and professionals from various fields are buying luxury cars and this affluent segment has been boosting sales volumes. If we look into city-wise wealth distribution, the Northern region in India (comprising of cities like Delhi, Chandigarh, Ludhiana, Shimla, and Jalandhar) comprises higher density of millionaire population than rest of the parts. This region therefore has the highest luxury car sales. After this come, Greater Mumbai, Ahmedabad, Pune, and Chennai. These cities have a luxury car sales pattern which is still higher compare to rest of the country.

The historical regional sales data of luxury cars sold in India shows that 32-35% of the total is sold in Delhi region only. This is possibly due to the psychological preference shift among the North Indian population to show off their wealth. Delhi is followed in this list by Mumbai, and Punjab state, where Ludhiana and Jalandhar are at the top two slots. Delhi also happens to be the biggest market for Mercedes-Benz, Mumbai ranks second followed by the states of Gujarat, Karnataka, Tamil Nadu and Punjab. This geographically distributed population could be clustered into classes on the basis of overall behavioral patterns observed in luxury brand consumers.

Classification of consumers of Luxury Brands

According to a leading research company, the consumer-population in luxury markets can be divided into three categories:

Functional- This segment comprises people who buy the luxury goods for their superior functionality and high quality. The people in this category decide to buy based on their logic, rather than emotions. In India, functional segment consumer-population is highest among the three segments.

Rewarding- The ‘status- symbol’ is the driving factor for this segment. The average age for this category is 35 years. People under this category are a major force behind the increasing sales figures of luxury cars in India.

Indulgence- This category comprises the youngest lot out of the three categories. Currently, this category is experiencing highest growth in Delhi and NCR regions.

Luxury car majors in India – Mercedes-Benz, BMW and Audi put together have around 85% market share. The German car brand Mercedes-Benz had first mover advantage as it had started operations in India in 1995 and there was no direct competition in this category. So, it remained ‘Numero Uno’ luxury car brand in India for more than a decade. But, market dynamics have changed significantly after the entry of BMW in 2006 followed by Audi in 2007.The overall market share of luxury cars has been reorganized due to the new entrants.

This has resulted in new equations being forged amongst the various players, driven primarily by a rapidly swelling millionaire-club having diversified choices and preferences. In 2006, BMW had 9% market share which has now grown to 42%, catapulting BMW as the number one luxury brand in terms of sales. Audi which started its operations in 2007 has had the fastest growth-rate amongst the three and has now captured 20% of the luxury car market.

So, the Indian luxury car market is favorable for new entrants who are capable of grabbing the untapped opportunities by following the customer-oriented approach and having ability to induce demand by innovation at each level of marketing mix to induce demand by innovation at each level of marketing mix

Luxury car-makers in India

The list of automobile manufacturers who are opening shop in India keeps growing. Currently India is home to exclusive showrooms of some of the most expensive cars in the world. Currently the luxury car makers who have released their cars in india include- * Ferrari

* Lamborghini
* Rolls Royce
* Aston Marin
* Bentley
* Jaguar
* Land Rover
* Porsche
* Maserati
* Maybach
* BMW
* Audi
* Mercedes

All these respected brands have released their flagship models in India. They realize the Indian market is set to boom and demand for these cars will always be there. The cars released by a majority of these car makers cost 1 crore and above. This goes to show how deep the pockets of Indian consumers are.

Recent trends in luxury car market

The luxury car market in india has recorded strong growth over the last few years. A luxury car involves spending large amounts of money, and are targeted at a niche section of society.Luxury cars have become the choice of vehicle for the young and effluent crowd in India. Drivers –

* Growth in high income households
* Low interest rate on loans
* Increasing investment in automotive sector
* Preferred choice of young and effluent
Challenges-
* Main challenge is affordability since most of these cars cost above 30 lakhs. These cars are designed to suit a certain part of society * Pollution – These luxury cars guzzle gas and in todays state of affairs pollution has become an important criteria to be looked into before purchasing an automobile. Key Trends-

* The automobile manufacturers are diversifying options available to the buyer, from car customization to personalized service to buyers. When buying a luxury car it is for certain that the company selling it to you will back you up through your period with the car * Luxury car makers are entering the pre-owned car market. Audi and BMW are planning to launch their own used car subsidy by the end of the year. Mercedes already has a pre-owned program for their cars. The importance of this is that in India a lot of people prefer to buy a used car and save a lot of money * Global companies are
eying India as a manufacturing base. Audi already has set up a manufacturing plant in Aurangabad. * Increase of distributors in India. With luxury car sales on the rise more and more distributors want to open showrooms in India. Thanks to this brands like Audi, BMW and Mercedes now have more than 15 showrooms across the country.

Questionnaire And Data Collection

This is primary research which has been done with the help of questionnaire, regarding how much people are aware of the luxury car market in India, Audi as a brand and in which car do they want to invest their money, Audi,BMW or Mercedes and why?

Q.1) Which brand do you prefer?

Options| Respondents| Percentage|
Audi| 9| 22.5|
BMW| 16| 40|
Mercedes| 15| 37.5|
Total| 40| |

Inference:
Out of 40 respondents we can clearly see from the pie chart that only 22.5% would prefer owning an Audi. The probable cause for this would be that Audi was the last luxury brand to enter the Indian market and hence does not have as big a fan following as the other two brands.

Q.2) What do you look for in a luxury car?

Options| Respondents| Percentage|
Design| 8| 20|
Safety| 6| 15|
Comfort| 26| 65|
Total| 40| |

Inference:
We can see that 65% of the samples are interested in buying a luxury car for the comfort and luxury it offer in comparison to other automobile brands. People consider this as a status symbol and are very picky when it comes to chosing a luxury vehicle. 20% of the sample chose a car for its looks and a minority 15% of the sample take into account the superior safety of luxury cars.

Q.3) How do you evaluate Audi’s build quality?

Options| Respondents| Percentage|
Good| 27| 67.5|
Average| 11| 27.5|
Bad| 2| 5|
Total| 40| |

Inference:
The sample audience believed that Audi’s had superior build quality and were very happy with the finish and feel of an Audi as compared to other luxury automobile brands. Some of the sample commented that they felt safe as soon as they heard the thud of the door closing. Some of the sample were undecided between the Audi and the Mercedes build quality.

Q.4) What do you think Audi’s brand position in the market is like??

Options| Respondents| Percentage|
Too High| 9| 22.5|
It is good| 19| 47.5|
Too low| 12| 30|
Total| 40| |

Inference:
The sample audience believed that BMW and Mercedes had better brand positioning in the market. Some inferred this from the fact that they see more BMW and Mercedes vehicles on the road than Audis. They believed that
Audi is slightly underrated and has a lot of potential as a brand.

Q.5) What do you think of Audi’s advertisement campaign?

Options| Respondents| Percentage|
Good| 18| 45|
Average| 15| 37.5|
Bad| 7| 17.5|
Total| 40| |

Inference:
The sample commented that they liked the new Audi A6 advertisement campaign. But some people said they don’t see too many advertisements of Audi on television as compared to that of BMW. In the print medium Audi has a stronghold

Inference:
As seen in the analysis a large majority of people prefer the Audi A4. This is probably because it is the most reasonably priced Audi in the market. Also a large chunk of the sample were interested in the SUV’s Audi has to offer. In India SUV’s are considered a status symbol. Surprisingly some people were interested in the upcoming A6. This shows that there is a large population of people out in the market who do not mind splurging 50 lakhs and more on a car.

Q.7) How would you rate your Audi experience?

Options| Respondents| Percentage|
Good| 31| 77.5|
Average| 7| 17.5|
Bad| 2| 5|
Total| 40| |

Inference:
The sample audience were very happy with the Audi experience. They felt
welcomed in the showroom and found the ambience to their liking. Only 5% of the sample felt that they could have got better treatment. This shows that luxury carmakers go out of their way to give you an excellent experience when you consider buying a luxury car.

Which is preferred more Audi, Mercedes or BMW?

European Major BMW entered in India in 2006. The company with headquarters in Gurgaon and production unit in Chennai had initial investment of 1.1 billion rupees. It has swiftly developed both infrastructure and dealership network. The production plant at Chennai, established in 2007, has an annual capacity of 3000 units in a single shift and it produces BMW 3 series and BMW 5 series sedans.

The rest of models- BMW 7 series, X3 and X5 are imported as CBUs. BMW 3 and 5 series account for 80% of the total sales of company in India, of which BMW 5 series has highest sales. BMW India, with its aggressive marketing, fast expansion of product profiles, strategic dealership location selection and supplementary financial service offering, has managed to wrest biggest market share from Mercedes-Benz. BMW and Audi, both focus on sportier features and new launches to encourage young buyers. Decrease in the average age of luxury car buyers is a favorable condition for this kind of selling strategy. BMW are know for their driving pleasure and anyone who has driven a BMW will always swear by it as it is a known fact that BMW’s are a completely driver focused brand. This is where they have an edge over their rivals.

Audi is the fastest growing luxury car manufacturer in India and regularly records a 75% increase in monthly sales when compared to the same monthly sales of 2010. With Audi becoming aggressive in the market, BMW and Mercedes should start to get worried as people become more and more aware of Audi’s superior build quality and top-of-the-line interior finish. Audi has always been known for its attention to details, which has helped it become as renowned a brand as BMW or Mercedes.

Mercedes Benz is by the far the oldest luxury car manufacturer in India, having been around since 1994. This gives it an advantage that it is already established in India. But saying that people are now shifting from Mercedes to a BMW or Audi. This is because Mercedes is what is considered to be an all-round car, instead of focusing on giving its occupants one ultimate sin i.e in the case of a BMW the driving pleasure or in the case of an Audi- the comfort and luxury. The Mercedes falls short of the other two brands in the fact that it does not give you the true luxury car experience. Still, Mercedes holds a large chunk of market share with people still buying Mercedes because of nostalgic reasons and the fact that is the most recognized luxury automobile brand in India.

Why an Indian customer would like to spend on a luxury car?

A study released by Kotak Wealth and Crisil Research reveals that India has 62,000 ultra high net worth households, with an average net worth of 12 million Euros. In five years, the number of such households would more than triple to 219.000, each household with a net worth of about 16 million Euros. A recent Merrill Lynch Capgemini Wealth management report estimated the number of individuals with a net of 700,000 euros at 126,700. The report said the five-fold rise in the net worth and the increasing propensity to spend would have a long term impact on the luxury market in India. The potential market size of the Indian luxury jewellery segment is 3.6 billion Euros, while the market for the luxury car segment in India is estimated at 2.4 billion Euros.

The only luxury sector in India which is set for a stellar development is the luxury cars. The fact that customers rely on after sale service locally and additional taxation if imported from another country, makes India the Eldorado for luxury cars. The sector has actually seen a 100% growth in sales for certain Western luxury brands, especially German brands. Driving a local made Ambassador car is not only passee, but it does no longer fulfill the show off factor, which in India’s luxury market, is most evident when it comes to cars. Wealthy Indians love to splash out and buy flashy colours, SUV’s and many limited edition models. The wealth of information and marketing on luxury cars is immense, therefore making consumers really savvy about the latest model or the latest customization opportunities.

A luxury car in India is so classified if it has a price tag of above 30 lakh rupees. As noted above India constantly sees an increase of individuals with a high net worth. These people prefer to drive in comfort and use their cars as a status symbol. As a result they decide to invest in a luxury car. The following are the points as to why an Indian customer would chose to buy a luxury car.

1. Safety

They aren’t always safer (lightweight, superfast convertibles, being the obvious exception), but luxury cars tend to offer more safety features than their non-deluxe counterparts, which translates into better crash-test results. According to Consumer Reports, 71% of 2009 vehicles with standard stability control, traction control, anti-lock braking systems, side-front airbags and curtain airbags cost at least $30,000. Audi offer all of the mentioned safety features in the cars in their lineup. Indian consumers especially need as many safety options they can get, knowing the way Indian drivers drive a car can never have enough safety features. The reassuring thud that you feel when you shut the door of a luxury car is enough for a person who has the money to invest in a luxury car. The customer knows that he is investing his money in a car that will keep him safe from even the most menacing Indian taxi driver.

2. Prestige

There’s no denying it. Heads turn when an Audi R8, Jaguar XF or Aston Martin DB9 rolls into view. They get parked in the best positions at valet lots and announce your arrival into polite society–or at least the best club in the city. Indian people in general love to flaunt their wealth and what better way to flaunt than to have the latest luxury car. Whether it be a speedy sports car like the Audi R8 that costs a cool 1.4 crores or the uber luxurious Audi A8 that can be specked out to cost over 1.2 crores luxury cars send out a clear message that you have truly arrived. And brands like Audi, BMW and Mercedes are synonymous in India with prestige. With celebrities chosing Audi and BMW as their choice of rides the brand gets associated with high class and exclusive society. All this prestige comes with a hefty price tag with a slice of prestige being dished out at a starting price of Rs 30 lakh.

3. Coexistent beauty and comfort

In the annual quality study from J.D. Power and Associates, only two brands, Jaguar and Porsche, received perfect scores for design quality. Remote-start and cold-weather packages from the likes of Audi and Porsche include heated seats and ski bags to help owners hit the shops or the slopes in the most comfortable way possible. With luxury cars coming out with more and more features that make you want to live in your car instead of in you home, customers don’t mind spending large amounts of money to ensure that they are always comfortable.

Audi now offers seats that have air conditioning and heaters on them, along with seats that can massage your back after a long day at work. Big padded leather seats ensure that you reach the comfort of your home in style. And the beauty of luxury cars is meant to be admired by everyone who lays eyes on the car. Be it the smooth flowing lines of the cars or the sharp edges , luxury cars are proof that beauty and comfort can go hand in hand. Luxury cars are meant to keep you comfortable whether you are driving or being driven. Especially in a country like India where extremes of temperature is experienced, it is very important that the customer be kept in comfort and luxury cars therefore provide the best possible air conditioning or heater so that the customer never realize how harsh the weather is outside his cocoon of comfort.

4. Interior fit for a king

Or queen, as the case may be. From straight-grained East Indian rosewood trim in the Rolls-Royce Phantom tungsten to thick lambs wool rugs in the Bentley Continental GT, luxury cars take opulence to the next level. And with luxury automobile marquees offering no extent to the customization you can undergo to your interior the customer is spoilt for choice. Right from the floor mats to the specific shade of leather that would deck the interiors of your car , luxury automobile brands are willing to go to any extent to keep their customer happy, at a price of course. When a customer decides to buy a luxury car he or she knows that they will probably be spending a good part of their day in their cars, thanks to Indian traffic.

So why shouldn’t they spec out their interior to their liking, even if it costs what a common man would normally spend on a car. So if a customer feels that a particular tree’s wood should line his dashboard luxury car brands should ensure that there be a tree near by that they can source the wood from. Luxury cars should cocoon the buyer from the outside world and provide comfort to its occupant like no other. Reclining heated seats that massage, a state of the art entertainment system and luxurious interiors are usually on the checklist for the potential luxury car buyer who would want to be chauffeured around town. Of course if a customer wants to check all the boxes on the aftermarket list when he is buying a luxury car he should be prepared to pay a hefty premium over the price quoted for the car, but that shouldn’t be a problem considering that he is buying the super expensive luxury car in the first place.

5. State-of-the-art technology

Historically, luxury cars have offered the latest and greatest safety features (anti-lock brakes, review cameras) and entertainment technology (in-headrest TV screens, Bluetooth) before these options trickle down to the masses. In this year’s luxury models, you can get everything from remote starters, electronic parking aids and rain-sensing windshield wipers to a fully integrated iPod music interface.

With luxury automobile brands offering all the technology possible to make your drive smooth and easy it is just a matter of time before the technology drives the car itself. The usual luxury car customer is a hard working ,time constrained individual who relies heavily on technology to get work done. When he buys a luxury car he expects that it would aid him in his day to day life.

With high end entertainment systems standard in luxury cars Bluetooth functionality has made it easier to use a cell phone while driving. And as for music luxury cars now offer IPod interface on the music system, and when combined with user interface systems like Audi’s MMI or BMW’s IDrive it makes controlling you technology easier for the customer. State of the art technology has also ensured that the customer no longer be worried about theft as luxury cars come with high end alarm systems and tracking devices that makes stealing these cars nearly impossible. The advent of technology has also ensured that the luxury car customer no longer has to hassle himself with complexities like parking , since features like automatic parking are now present on cars. Also now technology has eliminated the need for luxury car owners to constantly keep removing the car key from his/her pocket, as the car remotely senses the presence of the key in the pocket and opens and locks automatically.

6. Complete maintenance

Certified-pre-owned programs like the one at BMW offer comprehensive roadside assistance–and the assurance that only vehicles that meet BMW’s stringent standards and pass its certification process receive the certified pre-owned title. Brand-new BMWs are well looked-after even before they become CPOs, says Jim McDonnell, president of BMW North America, because the German company awards free maintenance and roadside assistance for the first four years of ownership.

Luxury car makers also realize that they have to keep their customers happy and as a result luxury car maker Audi offers its customers in India a 24*7 support line with roadside assistance should you car break down. Other services it provides include the use of a taxi while the car is not with the owner, on-site repair, taking responsibility of custody, transportation and storage of vehicle and service coverage that includes 95% coverage of India. Also Audi realizes that the clientele it provides to prefer to be comfortable and as a result have incorporated in its service centre a high end luxurious customer lounge should the customer have to wait for delivery of his car.

7. Potential to add individual style

Bugatti invites buyers to its Dorlisheim, France, factory so they can customize exterior paint colors, interior dashboard trim and interior monograms. New-car buyers at Porsche meet with a personal consultant to determine how to customize the vehicle. The 911, for instance, offers custom-painted air intake grilles and specialized aluminum or leather gear levers to colored ceramic brakes and fine wood trims like Makassar and sycamore. Luxury car makers leave no stone unturned in order to ensure that the their customer be happy with his car and make sure it reflects his personality and style. Luxury car makers usually have a whole section dedicated on the showroom to aftermarket accessories and trims. Audi offer its customers the choice to customize the car’s front and rear bumper along with the side skirts and exhaust tail pipes in order to give the car a slight change of personality. Also the customer is given the choice of his leather and wood trim and also is given the choice of entertainment system. With the choice of adding individual style never ending, when it comes to customizing one’s car the sky is the limit.

8. Horsepower

Okay so you enjoyed driving your Maruti 800 with all of its 37bhp. But you have worked hard and climbed the corporate ladder fast. And its time you had one of the cars that adorned the posters on the wall of your room while you were growing up. Would you want the 1.5 crore 5.2 litre V10 Audi R8 with 500 horses under the hood or will it be the 2.3 crore 6.2 litre Mercedes SLS with its 571 horses.

With luxury car makers releasing all their sports cars in India the Indian customer is now spoilt for choice. He can now decide to what level of “extreme” he wants to go. With luxury car makers like Ferrari, Lamborghini, Koenigsegg, Bentley, Aston Martin all opening shop in India there is a vast choice of powerful cars now available to Indian customers. And with power comes a price tag that stretches to an unbelievable 8 digits. With the price of theses exotic sports cars starting at 1.5 crores for the Audi R8 and that stretches all the way to 20 crores for the exclusive Aston Martin One-77, the theory goes that the deeper the customers pockets, the faster and more luxurious the car gets.

Also uber luxurious cars like the Audi A8 and BMW 7 series now come with massive engine that propel these 2 ton cars to unbelievable speeds and ensure you get to your meetings in time and in super comfort. Of course you shouldn’t expect to get the same mileage your good old Maruti gave you.

9. Consistent quality

Results from J.D. Power’s Initial Quality Survey found that Infiniti, Lexus, Mercedes-Benz, Mercury, Porsche and Toyota are the brands with the highest overall quality for 2008. Four of those–Infiniti, Lexus, Mercedes and Porsche–are premium brands. In individual categories, Infiniti and Lexus are the only brands with perfect scores for powertrain mechanical quality. BMW, Lexus, Mercedes and Porsche are the only brands that received perfect scores for mechanical body and interior quality.

It is also common the see brand loyalists in the luxury car segment. Once smitten by the luxury cars from Audi, Mercedes and BMW it is hard to undergo change. Very often you see individuals refuse to buy any other car other than one released by their favorite luxury car maker. Often the customer is smitten by the reliability and comfort his luxury car provides and as a result change is hard.

FINDINGS AND DISCUSSIONS

Bottlenecks in the industry
* Extremely high price, making it available to only a very select audience * With rising fuel prices and strain on the environment luxury cars are expensive to run and do not help the environment * Taxation on luxury cars is high

* High duty fee set by the government ensures that Indians pay more than double the price as compared to that what people pay in other countries * Competition from other brands who try to offer luxury cars at a cheaper price. * High service cost and maintenance.

* During an economic downturn luxury automobile manufacturers always suffer * Infrastructure is not present for these cars i.e. these cars need smooth roads to be driven on

Suggestions and Recommendations

* The pre-owned luxury car market is still largely untapped. This area holds a lot of promise and soon BMW and Audi should be starting their own used car division. * With fuel prices on the hike and the environment taking strain luxury car makers should take some initiative to design green technology. Hybrid cars should be looked into. * Better financing options would close the gaps between the big three luxury brands. * A big track day once a year where all the luxury car community get together. Brands can release their new cars here and also organize for the customers to test out their entire model range.

Conclusion
India was introduced to luxury cars in 1994 when Mercedes Benz launched its automobiles in India. At that time the choice was limited and after sales services were almost never present. The luxury car market has progressed greatly since then. Ever since 2006-07 when BMW entered the market the luxury car market has boomed. Within a span of 5 years BMW ate into Mercedes share of the luxury car market. With Audi entering the market in 2007 the competition has heated up and the three big German brands share a near similar portfolio of cars. Each of the three marquees has their own strengths and weaknesses. BMW is known for its exceptional drive quality and the driving experience one gets from a BMW is known to be one of the most sublime experiences. Audi is renowned for its fantastic build quality and the luxurious interiors have no competitors. Mercedes is known for its all round luxury-car experience and design.

Based on these criteria a buyer choses what he looks for and then selects his car. In India BMW holds almost 42% of the luxury car market share, with Mercedes close on its heels with 38% of the share. Audi is the fastest growing brand with around 19% of the market share. Audi has been aggressive in the market with new car launches every 3 months or so. Audi is also known for its extravagant car launches in the country’s capital with a big list of celebrities in attendance. But the truth of the matter is that most Indian customers who are going in to buy a luxury car always get confused because the specs of the cars from all three brands are almost identical and so is the pricing of the cars. Hence all the three brands have to go out of their way to make sure the customer chooses their car over that of the other brands. This includes sending the test car to wherever the potential customer would like, a state-of-the-art showroom with 5 star service and also extra special car service centre. Also each brand offers a car customization program where the customer can personalize his car with choice of leather, wood, music system and after market parts, at a price of course. The three big brands also set aside large budgets for advertisements and promotions. Full page newspaper advertisements are a common occurrence and events for car launches are set up around the city. The main challenge for the luxury car market is to set up an efficient service network as parts for their cars are not available in the market and have to be imported into the country. This is where Audi, BMW and Mercedes have an edge over their competitiors in the luxury car market. They have each set up full fledged service centres in all the metro cities and have trained staff to back up the state of the art service centres.

The luxury car market in India has started to really take off and is set to boom in the next few years with almost all car makers setting up shop in India. And the fact that they are selling proves that Indians have deep pockets. Recently Aston Martin sold a Rs 20 crore One-77 in India. Indians not only look for luxury but also speed and Ferrari and Lamborghini cater to those needs with their entire product portfolio released in India, with prices starting at 2.3 crores for their cars. Rolls-Royce recently announced that they have sold 50 cars in 2010. That is a truly phenomenal figure. Every automobile brand wants to release their cars in India and even with the 110% duty charge on foreign cars Indians do not get deterred. The only thing missing in India though is the roads to drive these beauties on! Hopefully the crazy demand for luxury cars will motivate the government to build roads that are fit to drive these cars on.

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