‘Major part of our expansion will be in Tier-II and Tier-III cities’

The luxury car market has been shrinking in excess of 20% plus this year, which is a radical shrinkage. In tough times we have been able to increase our market share which shows that we have been performing better comparatively.

By: | Published: October 12, 2019 9:30 AM

Luxury automaker BMW, which currently enjoys a 25% market share in the segment, is expanding its network in Tier II and Tier III cities. The automaker has been gaining market share in the last few quarters. Rudratej Singh, president & CEO, BMW India, tells FE’s Shasahnk Dipankar on how the company is faring in the current environment. Edited excerpts:

How has the luxury car market been performing in the car market?

The luxury car market has been shrinking in excess of 20% plus this year, which is a radical shrinkage. In tough times we have been able to increase our market share which shows that we have been performing better comparatively. Indian corporates are used to cyclical downturn but what has happened here is for the first time, all the macro-factors have lined up with structural factors. Reforms are in right directions but there is no good time for these decisions but there can be a best bad time for it.

What are the biggest markets for BMW in India right now and how it has been performing in these markets?

Out top seven cities give us the bulk of our volume, in excess of 70%. I do not see any market behaving very differently to each other. The sales performance and growth over this year’s performance and the performance of new products which we have launched over the last 10-15 months has been fairly broad based.

What about expansion plans especially in Tier-II and Tier-III cities?

Tier-II cities are extremely important for our growth strategy. We have increased our touch-points from 50 last year to 70 and are planning to reach 100 in the next six to twelve months. We are expanding our network and major part of this expansion will be in tier-II and tier-III cities. Currently we are expanding in Dehradun, Cuttack, Guwahati and couple of other cities.

What is the current market share of BMW in the luxury car segment?

Currently we own 25% of the market segment which was 16% three years back. Relative to others we are performing in a superlative manner. Every quarter we have actually gained segment market share as a result of our diverse portfolio. We are slowly but surely inching towards market leadership.

Is there a significant impact on luxury car market as are faced by other automobile companies or the luxury car market is immune to such shifts in demand?

Definitely the luxury car market is also affected by such shifts in demands. If the consumer sentiment is down then discretionary spends go down faster. Many of our luxury industry products are wants as much as needs, if not more and therefore those gets compromised first. I also feel that they will bounce back faster as well once the sentiment changes.

What are your plans regarding electric vehicles?

In India our plans depends on two factors — infrastructure buildup, which is flexible charging infrastructure, and consumer demand. If the consumer demands it, we will be ready. The government has given us a direction by announcing the policies, now its time for companies along with government to decide how to take it forward. Once it is done we would be the early adopters of EVs in the premium segment.

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