Design is important to the Indian customer

Updated: Sep 30 2006, 06:11am hrs
Peter Kronschnabl, who would love to learn all about cricket, play s golf and likes jogging, loves India and was keen on being posted here. Born in 1966, he has a degree in International Business Management and has been with BMW AG since 1995. In 2006,he became the president of BMW India Pvt. Ltd. He speaks to C Jayanthi on BMWs perception of India.

Do you think BMW is late to the Indian market given that Mercedes already has a 66% share of the Indian luxury car segment

It was not a late entry for BMW. The sales figures of Mercedes show to us that there is potential in the market. Not only Mercedes, if you see other entrants like Audi, Porche, all these premium brands, as soon as they entered the premium segment just extended more and more. BMWs strategy was always to build a 100% subsidiaryespecially when we enter a strategic market like India or China where we have a long-term interest. The market became more interesting for us in 2001 with the changed local regulations (100% subsidiaries are now allowed). So it is perfect timing to come to India.

How do you see the market for luxury cars growing in India Last year 3,000 cars were sold in this segment.

Next year, we expect the market for luxury cars in India to be 5,000 units and by 2012-2015-we expect the market to expand to 10,000 units. The Chinese market at the moment is 10 times bigger than India for premium cars. Also, one needs to know that in China, every manufacturer is present. In India, as the luxury cars on offer were limited, demand was also limited. If people did not like one car there was no choice. Choice brings in demand, so with every new entrant, you get 100-200 units easily even without dealership. When BMW comes in with production and state-of-the-art dealership, the whole segment will expand.

How would you classify the Indian market: would you call it price-conscious, brand-conscious, price-sensitive

In India you are supposed to get value for moneyour cars give you a lot of value for the money you pay. The customers will appreciate that. The other day someone told me that the 7 Series for instance gives 100 km for 14 litres of fuel . I would say that, that is remarkably good value for money.

Will you be producing hydrogen cars in India

No, not in India. We will be selling hydrogen cars next year but these will cost 3 times the price of the regular BMW model. It will only be the 7 series and you will need hydrogen gas stations which India does not have here.

What is more important to Indian customers: aesthetics and looks or functionality

What is very important to the Indian customer is design and they like state-of-the-art-technology and being the first one with it. I wrote my masters thesis in 1994 on branding in India and this is what came out of that research. I had a plan to come to India and I am honoured to be present when the whole country is booming. European markets for instance are settled. We shall be adding to that 200 jobs at BMW and upto 600 jobs at our dealer networks in the next 3 years, all in the latest technology segment.

Do you do customer profiling What kind of results has it thrown up in India

We call customer profiling milieu studies. At the end of the day you have to know what your customer wants. Our customers are normally entrepreneurs, independent businessmen. We do our customer profiling independently where an international institute is collaborating with an Indian institutecustomers and potential customers are interviewed to know the desires of these people. The results of the study we are doing here will be known in November.

Will your Chennai plant have a test-track What other features will it have

At the Chennai plant we have a short test track where we can test every single car before it goes on the road-BMW standard global quality demands that every car is of perfect quality. In the factory, there is going to be a technical training centrefor our staff as well as our dealers.

Will the BMW 3-series and 5-series that are to be manufactured in the Chennai plant have the same features as the BMW manufactured globally

The cars will be identical. That means latest technology and the same quality. On the other hand, we have also test-driven cars for 25,000 km on Indian roads. After that we took back the cars and disassembled the engines, to see what changes we needed to do. For instance, we improved by 18 mm the ground clearance of the car. We even reinforced the shock absorbers.