BMW wants to create, not capture, premium car market in India: Vikram Pawah
BMW India launched the new BMW 5 Series in India on Thursday. The business sedan is set to take on the likes of the Mercedes-Benz E Class, the Audi A6, the Jaguar XF, the Volvo S90 and the Lexus ES300h.autos Updated: Jun 30, 2017 08:06 IST
Luxury segment contributes up to 5-6% of the total PV sales in European countries, but it forms only 1.1% in India. BMW’s new ‘power to lead’ strategy aims at creating a market and tapping that untapped potential.
“There’s a lot of headroom in this segment, and we plan to tap that potential. The need is to get more people on board to buy our cars, and create the market,” Vikram Pawah, president of BMW Group India, told HT.
With the latest edition of BMW 5 Series launched on Thursday, BMW Group India wants “to redefine” the segment of executive sedans which includes the Mercedes E-Class, the Audi A6, the Jaguar XF, the Volvo S90 and the Lexus ES300h.
“The BMW 5 Series has always stood the test of time. The aspiration of people buying these executive sedans is growing very rapidly. They want a multifaceted and multidimensional product that caters to various needs. We are aiming to provide that wholesome package in the form of the new 5 Series,” he said.
The luxury sedan contributes up to almost 30% of BMW’s sales in India, the largest in the sales pie.
One of the earliest players in the luxury car segment, BMW completed its “own decade of Make in India” in March 2017. But after rising to the top, it lost leadership position to Volkswagen’s premium subsidiary Audi in 2013, and then to its German arch rival Mercedes Benz in 2015.
But at this point, numbers don’t matter much to Pawah, who led operations for Honda Cars and Harley Davidson in the country, before taking reins of BMW Group India in January.
Over the last decade, the company has, through three-yearly strategy periods, strengthened its foundation in the luxury segment, grown to become the segment leader and sustained the growth in the last three years.
“And now in 2017, we are setting the next three-year agenda called ‘Power to lead’. We are not putting a number or timeline around it. ‘Power to lead’ is a mindset about being stronger and the best in every segment -- be it our products, our dealers, marketing, customer engagement, or profits and volumes. We want to set a benchmark in whatever we do,” Pawah said.
The German automaker will invest Rs 120 crore in India this year, taking the cumulative investment in the country to Rs 12.5 billion. The company aims to increase its sales network to 70 in 2018, from the present 63 touch-points in 30 cities. Besides, BMW has “mobile studios”, a mini-showroom on wheels, to reach out to 50 other cities.
Mercedes-Benz India, its biggest rival and the segment leader in the country, has 86 outlets in 41 cities.
But contrary to Merc’s all-guns-blazing dozens of launches every year, BMW is steady and calm. It is calling 2017 “the year of the 5”, and will introduce some refreshes and upgrades later this year.
“Then next year, we plan to launch the BMW 6 Series Gran Tourismo between the 5 Series and the 7 Series, which will be locally produced. These two are the biggest products we are offering to expand our market in the premium segment,” Pawah said.
When asked about the uncertain market policies over emissions, taxes and other norms in India, Pawah said, “It has been much easier for us at BMW, because we always had one philosophy and we still stick to it – make products for the world. So we never made a product specifically for India. The product that we manufacture in Chennai adheres to same environmental and safety norm as it does in Europe.
“Like any growing baby has its pain, a growing market like India will have its own issues. That is how the potential of the market is unlocked. We are happy to support it,” he added.
Pawah said the company would not make any product specifically for India, saying “customers expect us to deliver to them global products in India, not Indian products in India”.
Talking about the electrification of fleet in India, the BMW India boss had few concerns: “We need to address issues such as having charging facility at decent intervals; customers’ concerns about getting stranded in the middle of the road if the vehicle discharges completely.”
The carmaker sells its flagship sports hybrid, the BMW i8, in India, via fully imported route. Globally, its small electric car, the BMW i3, won the World Urban Car of the Year 2017, at the New York International Auto Show.
“I would love to bring the i3 to India, but then the infrastructure needs to support. Once we have some clarity on the timeline and plans from the government, we can bring the product to India. There needs to be a business reason to bring a car to India,” Pawah said.
Asked about doubts over the new indirect tax regime, the Goods and Services Tax, Pawah laughed off saying, “I’m not an economist”, but added: “It may have some teething issues, there would be a learning curve. But ultimately will lead to ease in doing business.”