Red Sea crisis impacting supply chain, expect recovery in coming months: Audi India Head

Muonio: The situation in the Red Sea is creating supply chain issues for German luxury carmaker Audi, impacting car deliveries to customers in India in the first quarter but recovery is expected in the coming months, according to a senior company official.

With electrification on its primary agenda, the company is also evaluating the possibility of assembling electric cars in India, Audi India Head Balbir Singh Dhillon told PTI.

"We are also challenged from time to time by various factors. Very recently because of the Red Sea situation, there is a supply chain constraint that we're facing in the quarter one of 2024. It is challenging for us in the first quarter but we expect to recover in the coming months," he said.

Dhillon was responding to a query on outlook and challenges in 2024.

Deliveries to customers for certain models at present have been delayed by a few weeks, he noted.

Container vessels have been facing attacks in the Red Sea, one of the most important trade routes in the world, since November last year following Israel's war against Hamas.

When asked about the traction of electric vehicles in India, Dhillon said, "As of now, it is at a very nascent stage but this is like a marathon, we have to run for a long period of time."

Penetration of EVs in the luxury space is about 6-7 per cent, he said, adding "Our penetration is 3 per cent but most of our products in the luxury space in electric cars is over Rs 1.2 crore today." Going forward, Audi globally is going to launch many new products and some of them will also make it to India, Dhillon added.

On plans for locally assembling EVs, he said,"We're also evaluating at some point in time we need to assemble these cars also in India. It is not decided yet when and how but I think more information will come in the future but we are moving towards that plan. We are very clear that the future for us is petrol and electric..." At present, Audi's EV portfolio comprises the Q8 50 e-tron, Q8 55 e-tron, Q8 Sportback 50 e-tron, Q8 Sportback 55 e-tron, e-tron GT, and RS e-tron GT.