Red Sea crisis impacting automotive supply chain, says Audi India

The ongoing crisis in the Red Sea has been impacting the automotive supply chain, said Audi India head Balbir Singh Dhillon. Speaking to PTI in an interaction, Dhillon said that the crisis is impacting the German luxury auto manufacturer's car deliveries to customers in India. However, he also expressed hope that the situation will improve in the coming months.

Audi India's head also hinted that the delay in delivering the cars to the customers would continue in this quarter ending in March 2024. "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 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 noted that deliveries to customers for certain Audi models at present have been delayed by a few weeks.

Over the last few months, container ships have been facing attacks in the Red Sea, which is one of the most important trade routes in the world, since November last year following the Israel vs Hamas conflict.

Speaking about the other aspects of the automaker's strategies, Dhillon said that electrification is the brand's primary agenda. In order to sell electric cars in India at a cheaper rate, Dhillon said that Audi is evaluating the possibility of assembling EVs in the country. Audi has already entered the Indian electric car market and now aims to ramp up its efforts in the segment. When asked about the traction of electric vehicles in India, Dhillon reportedly 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."

He reportedly said that the penetration of electric vehicles in the luxury car segment in India is about seven per cent, further adding, "Our penetration is three per cent but most of our products in the luxury space in electric cars is over ₹1.2 crore today." He also added that going forward, Audi globally is going to launch many new products and some of them will also make it to India.

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."