Audi Targets India’s SUV Market with Q3 Variant

Volkswagen AG's Audi unit is trying to capture a bigger share of India's SUV market with the new Q3 S, a new stripped-down version of its entry-level Q3 compact crossover vehicle.

Audi's India chief Michael Perschke says the 2.5 million-rupee ($37,100) Q3 S will be the least expensive luxury SUV or crossover sold in the country. It costs 230,000 rupees ($3,400) less than the lowest-priced standard Q3.

The new variant, which is powered by a 2.0-liter, four-cylinder diesel engine, drops such features as four-wheel drive and swaps a manual transmission for an automatic gearbox.

The company is assembling the cut-price crossover from kits at its factory in Aurangabad, India, which also makes the larger Audi Q5 and Q7 crossovers and the A4 and A6 sedans.

Perschke didn't disclose a sales target for the Q3 S. The brand's overall deliveries in India jumped 19% year over year to 5,500 vehicles in January-July period of 2013. Audi aims to boost full-year sales there 20% to 10,800 units.

SUVs and crossovers have been the strongest segment in India's auto market, soaring sales 52% to 553,000 units in the fiscal year ended on March 31. But deliveries of such vehicles dropped 18% in July, marking the category's first decline in four years.