Audi will start assembling its Q5 SUV in India from mid-2010. The company plans to assemble more cars locally at its Aurangabad plant instead of importing completely built units (CBUs) that attract duty upwards of 100%.

Currently, it manufactures the A4 and A6 under CKD production in Aurangabad.

"The Audi CKD production site in Aurangabad can be adapted to the demand of the Indian market. Around 750 cars were produced at the CKD site in 2009. Until 2015 we plan a yearly production of 5,300 cars," Tiers said.

The luxury car market in the country has grown to 7,000 units from only 2,000 three years back, and is expected to touch 10,000 in 2010. Luxury car makers are gearing up to capture more of the market by manufacturing the popular models here to bring down costs. The Audi Q5 is priced at Rs. 3.8 million (US$ 81,914) for a base model. The company did not want to comment on what could be the price for the CKD model.

At present, the company is in the process of expanding its showrooms from eight to 17 with new outlets coming up in Kolkata, Delhi, Mumbai, Jaipur, Chennai, Ludhiana, Lucknow, Coimbatore and Nagpur.