BMW will also go for dealers expansion with 13 more in the next 12 to 15 months. In an interview with R Ravichandran of FE, Rundratej Singh, president & CEO, BMW Group India, while terming the current slowdown is short-term in nature, asked the industry to avoid taking short-term measures.
Undeterred by the current slowdown, the Indian arm of German auto major BMW, sees its three-pronged strategy — brand push, new products launch and aggressive marketing strategy — will help overcome the slowdown blues and better its sales than peers in the coming months. The recent relief measures of the Union government will definitely help spur the growth across the industry.
BMW will also go for dealers expansion with 13 more in the next 12 to 15 months. In an interview with R Ravichandran of FE, Rundratej Singh, president & CEO, BMW Group India, while terming the current slowdown is short-term in nature, asked the industry to avoid taking short-term measures. Excerpts:
The entire automotive market in India is undergoing turbulence times. Your views?
It is not unique and it is prevalence globally. While there have been many reasons for the slowdown, the industry should not look at under utilisation of capacity. Given the changing dynamics, including in technological advancements, companies need to create demand for their products, brand and stimulate growth rather than applying pressure which is not worth. While there is going to be uncertainty, volatility and ambiguity in the short-term, the long-term growth in India will be rosy and hence the industry should avoid taking short-term measures.
On the relief measures just announced by the union finance minister?
The measures expect to bring back confidence in the minds of common public and will help spur the growth. Infusing liquidity into the market, 30% depreciation, cut in GST rate on EVs among other things will augur well for the industry. The government has done well on its bit but the industry also needs to do its action to ensure that demand revival at the earliest. We see the ensuing festival season will bring some positive sentiments and the same will lead us to know how the next 12 months pan out to be.
Can you throw light on the BMW growth in India so far this year and the industry in general?
While there is no exact figures available as far us luxury car industry is concerned, however, reports suggest till July the industry saw degrowth of more than 25%. But given our brand positioning, marketing and brand offensives and launch of new products like 7 Series, X7, X5, 3 Series, Grand Turismo, X4, X7 over the last one year, BMW has been able to offset the slowdown blues significantly and has done better than the peers in the market with a degrowth of 4% only till July at 5,579 units. Our promotional programmes like Joyfest, xDrive experience, M Performance, Golf Cup International and cultural engagements across the country also helped us in pushing our sales during the year so far. While it is unpredictable now, the next three months (festive season) are going to be the telling period for us at BMW. With captive financial arm — BMW Financial Services — 360 package, our penetration into tier II cities is getting improved month after month.
On the localisation level at the commpany’s Chennai plant?
We have been increasing our localisation level over a period of years and it has crossed more than 50% now. Nearly 11 of our total product portfolio in India, including Mini Countryman, have been localised to the extent of more than 50%. While it was 9 products in 2018, we have added two more products — X4 and X7 — in 2019 for localisation. We will see more such products getting localised in the coming years to add on India growth story.
Your comments on fresh investments, dealership expansion, new products launch?
The parent has invested sufficiently into BMW India, financial services arm to the tune of Rs 1,250 crore so far. We don’t see or require any fresh investments at this point of time. On the dealership side, of course, we will be adding 13 new dealerships (3 in the near future) by 2020 to take the total to 50. Our existing dealers are healthy and are making profits and have shown interest to expand their footprint into tier II cities too. There will also be a few new dealers joining us in this expansion. While we have more or ended this year (2019) with launch of a slew of new products already, based on the sentiments and market revival, we will launch more products next year.
On the BS VI launches and cost escalation?
We are ready with BS VI onslaught. In fact, we have already launched petrol version of 3 Series. We anticipate there will be some quick purchase of BS IV vehicles before April 2020 as the BS VI vehicles of us will cost 7% more than the existing price of all models.
Can you throw some light on the BMW Motorrad?
We have sold around 1,219 bikes till July. Our India made (in collaboration with TVS Motor at Hosur) bikes like BMW G310 R and BMW G 310 GS have been doing extremely well. With overall industry is undergoing challenging times, there is some sort of temporary setback for us in this segment, but we see things would improve going forward. We are looking at introducing more products going forward.