Once a leader in India’s luxury car market, BMW India sold 6,812 units in 2014, compared to over 10,000 each by Audi and Mercedes. To counter the slowdown in other emerging markets, the car maker has stepped on the gas in India with more investments and increased localisation, BMW India president Philipp von Sahr told HT.
How important is India for BMW, given the growth pressures we are seeing in some of the other emerging markets?
If you see absolute volumes, India is still not big. But if you see in relation to other markets, then India becomes important. Brazil and Russia in the BRIC markets are both disappointing; China was growing in double-digits but now it is in single-digits. So among the BRICs markets, India is the most stable.
How much is BMW investing in India?
We invested additional Rs 100 crore in the business this year. We are not just a premium product provider, but also offer premium services. So we are increasing our investments in BMW Financial Services to Rs 640 crore from Rs 530 crore.
You are setting up showrooms for your M brand of cars…
We opened the first M studio in Mumbai this week. Our plan is to have 7 M studios in Ahmedabad, Pune, Delhi, Hyderabad, Bangalore and Chennai, apart from Mumbai by the end of 2016. The M products (M3, M4, M5 and M6 Gran Coupe currently account for only 1-2% of our sales, but it is growing.
Will you increase yourlocalisation further in India?
We have been increasing localisation. This year we had the first locally-produced diesel engine in Chennai. We have also now localised gearbox, dashboard, panels, among other things. We have reached a localisation level of 50% and this gives us more profitability and flexibility as we don’t have to wait for gearbox coming from Munich, which takes six weeks or so. So we are now in a very good shape and prepared for the future.