BMW to create new segments for growth

BMW, India’s second biggest German luxury car makers by sales, is charting out a new growth trajectory this year with a slew of new models launches and creating what it calls “new segments” to lure new buyers to expand its customer base in Asia’s third biggest car market.

“Last year was our best record year in 11 years in India and we are aiming for another record year this year,” Vikram Pawah, president at BMW Group India told Financial Chronicle in an exclusive interview on Thursday. BMW grew 25 per cent last year, selling 9,800 cars.

Pawah, who completes one year in March, said the brand has put in place strategy to grow the luxury car market in Asia’s third biggest economy despite flip-flop policy of the government on automobile sector impacting sales.

“This year we launched the BMW 6 Series Gran Turismo, which is sports activity vehicle combined with styling and comfort of a sedan,” Pawah pointed out. He said the luxury car market in the country till now does not give such an option for the discerning buyer. Launched at Delhi Auto Expo, the BMW 6 Series Gran Turismo sits between BMW 5 Series and BMW 7 Series. It will roll out of its factory at Chennai on February 23.

Priced at Rs 58.90 lakh, the locally produced vehicle competes against archrival and market leader Mercedes-Benz’s long-wheelbase E-Class. The E-Class has been a runaway success for Mercedes, offering the kind of space and luxury never seen before in the segment.

Being a large liftback with a similarly long wheelbase and enhanced rear seat space, the BMW 6-Series GT will aim to beat the E-Class at its own game.

Pawah said the BMW 6-Series GT is fun to drive and driven around. Its diesel version will be launched in the second half of this year, he said.

“Next year we will also create yet another segment in the growing luxury car market with the launch of the BMW X4, the first-ever sports activity coupe (SAC) in the mid-size segment,” Pawah said.

He said the second generation BMW X4 (first generation in 2014) combines X-family DNA with elegance of BMW coupés and focuses on driving dynamics and sporty design.

“It has increased length, width and wheelbase but lower roof for new, more sporting proportions,” Pawah pointed out, adding that it provides more comfort, agility and driving pleasure. “We are exploring the business case for its local production,” Pawah said.

Significantly, the Gurgaon-based company has launched a total of five new cars till now this year, including  BMW 6 Series Gran Turismo,  BMW M5, BMW X6 xDrive 35i,  BMW M3 Sedan and  BMW M4 Coupe.

Pawah said the company would also launch the BMW X3 on 19 April, the Mini Countryman in June and the BMW i8 Roadster, the plug in hybrid electric vehicle, later in the year.

“The BMW 5 Series launches in June last year and BMW 3 Series, BMW 3 Series GT and BMW X1 are the volume drivers for us,” Pawah said, adding that these models accounted for 60-70 per cent of the total sales.

He said he was also betting big on the BMW 6 Series Gran Turismo to bring in volumes this year.

Pawah said the taxation on luxury vehicles in the country was limiting sales growth and jobs creation as more sales would creates more jobs in the country at the factory and dealerships and ancillary levels.

“If you compare the premium and normal cars, the tax differential is big and puts us at some degree of disadvantage. About 50 per cent of the price is taxes for luxury cars in India,” he decried.

This huge taxation is limiting luxury car growth in the country with customers often asking if a luxury car costs $30,000 in the US, why it was $50,000 in India, Pawah said, adding that there was an urgent need to create a level playing field for luxury cars market to take off in the country.

On electric cars, he said, BMW, which sold 1 lakh cars worldwide last year, was the first one to introduce an electric car in India was back in 2015.

“The road map should be first the plug-in hybrid electric vehicle and after having set the emission targets and infrastructure for charging in place, automakers will line up efficient green vehicles in the country,” Pawah said.

Michael Gonsalves