how will the end consumer benefit from this? Can we also expect the prices to
significantly drop for all localised cars in India?
Indirectly yes. We will not decrease the price because of
this. But if you see, India is an emerging market with a high inflation rate.
Normally we have to increase the prices of our cars three to four times in a
year. Now with the localised parts, we don't have that pressure any more,
increasing the prices one or two times will be sufficient.
What’s been your
experience with BMW India business since you came into the country??
When I started in September 2012, to be honest the premium
market was in a lousy condition. Profitability for any of the manufacturers was
not there, the prices were raised month, by moth, by month. There was high
stocks and low contribution margins for the car. All the sales were pushed day
by day in the newspapers with 2012 cars at 2011 prices or whatever. This was
poison for the premium manufacturer. So
we decided to go out of these ways and look for profitability by investing in
our dealerships and making localisation investments. It’s only possible if you
make a good business case all over. A customer has to pay a lot to buy a
premium car in which he wants quality, with perfect service and customer
orientation and so we invested in dealerships.
The 1 series hasn't
quite made its mark in India. In that segment, a sedan is what the buyers seem
to prefer. Do you plan to close up the gap with a 2 series just to cover the
Of course we have a lot of models in the BMW line up that we
don't offer in the Indian market. On the other hand we offer eight different
Chennai produced cars which is a lot more than our competitors. Like I said,
when the premium market was not profitable, we obviously withdrew some models.
You don't need five different models, maybe two is enough. Also you have to
look at every car, does it make business sense--Can we produce it here? Can we
bring it? In the long term I see growth in the SUV market than in the sedan
segment. Both are major markets for BMW in India, but the SUV market I predict
will be seeing more growth in comparison.
You plant to launch 15
models this calendar year. Could you tell us which ones?
We have already launched the i8 and the 6 Series Grand
Coupe. We plan to launch the new X6, X6M, X5M, lifecycle improves of 3 series,
1 series, X1, M6 Grand Coupe, X5 M-sport version and some more.
How much have you
invested into India and how much is more in the pipelines?
Now we have invested a total of 4.9 billion Indian Rupees.
Because India is an emerging market, I promise you we will invest further, but
how much we don't know yet.
Are you also planning
to expand your dealer network?
We have a target to increase our dealer network by 15pc by
the end of this year.