100 years for BMW Group means 100 years of forward thinking, Vikram Pahwa
By Sheela Mamidenna
The youngest of the German cars in India, BMW, is fighting back to reclaim its leadership position in India. With its new Indian President and the company’s ‘power to lead’ strategy, BMW India recently launched the newest version of its luxury sedan, the 5 series, on June 29.
Locally produced at the BMW Plant Chennai, the all-new BMW 5 Series will be available in diesel and petrol variants at all BMW dealerships across India from 1 July 2017 onwards.
With the official implementation of GST on July 1, BMW is hopeful that it will make a strong comeback in India in a segment that accounts for less than 2% in the passenger vehicle market.
With BMW, MINI and Motorrad, the BMW Group has its sight set firmly on the premium sector of the Indian automobile market. Along with automobiles and motorcycles, the BMW Group's activities in India comprise of financial services for its premium clientele. Till date, BMW Group has invested $192.7 million (Rs 12.5 billion) in its subsidiaries in India. (BMW India – $80.1 million and BMW Financial Services India – $112.6 million).
BMW India is a 100% subsidiary of the BMW Group and is headquartered in Gurgaon, NCR. The wide range of BMW activities in India include a manufacturing plant in Chennai, a parts warehouse in Mumbai, a training centre in Gurgaon NCR and development of a dealer organisation across major metropolitan centres of the country.
Speaking to The Dollar Business, Vikram Pahwa, President BMW Group India, is confident that the growth of the Indian wing of the company, BMW i, ‘lies in its ability to find answers for future challenges.’
The Dollar Business (TDB): The recent announcement that BMW is investing Rs 120 crores in India, will this give back the first position that it lost to Mercedes? How will it help in regaining the sales volumes as they are still hovering around the 2011 numbers?
Vikram Pahwa (VP): Last year BMW Group completed 100 years. Ever since it was founded in 1916, the BMW Group has played an important role in shaping the future of mobility. It has done so by constantly reinventing itself, evolving from an aircraft engine manufacturer to a motorcycle producer and then a carmaker. 100 years for BMW Group means 100 years of forward thinking.
This year, in 2017 BMW Group completed 10 years in India. We are presently in the midst of celebrating a decade of the BMW Group in India. Yet we are taking the next step to continue the success story of BMW as the most valuable premium automotive brand.
The strategy Number ONE > NEXT as we call it, provides the strategic basis to constantly grow.
From this we draw our mandate to define the new Strategy and the Vision for BMW, MINI and BMW Motorrad in India. Now is the time to prepare for the future! We have started our strategic realignment already in the last three months. We are charting the right course for the future. And we have put into action numerous projects that will pay off in the long term. The future Strategy for India includes new directions, methodologies and prioritisation to become the most desirable premium automotive brand. How we gear up for the next 10 years will define our future.
2017 has started on a very healthy note and BMW Group India is confident of registering a positive growth in sales. From 2007 till 2009, BMW Group India built a very strong foundation to secure its future in India. From 2010 till 2012, the focus was on growth and achieving leadership in the luxury car segment. From 2013 till 2016, BMW Group India consolidated its position with a clear vision of sustainable growth and profitability.
From 2017, BMW Group India will move forward with the ‘Power to Lead’. BMW India will continuously focus on its competencies to remain a value-driven, customer-focused organization, with a clear goal to be the best, and set a benchmark in the industry in every aspect, with passion, performance and excellence. If you want to benefit from the dynamics of the Indian market later, you need to act today. This is what are doing. I strongly believe that in the time to come for BMW Group India to move forward with the ‘Power to Lead. Power to Lead is just not a mere statement, it is the mind-set with which we conduct and lead ourselves. It is our constant endeavour to be the best, be a benchmark in the industry and in every aspect of business, with passion, performance and excellence.
Everything we do, we do with conviction. We know our strengths. And we will continue to do what we do the best.We are taking great strides in implementing our India strategy and this will give us a significant competitive edge with a clearly formulated vision. Today various activities initiated by us will provided BMW India with a solid basis and develop a strong foundation for the future.
In 2017, BMW Group will increase its investment in India to Rs.12.5 billion from Rs.11.3 billion.
TDB: With the recent developments that the Indian government is actively looking to encourage battery operated cars in India, how is BMW trying to address the competition? What governmental support is the company looking at?
VP: The world we live in is changing and a changing world constantly demands new ideas. The global automotive industry is witnessing a paradigm shift from the conventional combustion engine to sustainable mobility solutions. This iconic change is inevitable. Even here in India. With growing urbanization and increasing environmental challenges, we need to answer the mobility needs of the Indian luxury consumer living in the upcoming megacities of the country.
We sincerely believe our growth lies in our ability to find answers for future challenges. Our outlook for the future will also shape how BMW Group will be perceived as a company by the world. It’s not just about looking at the ‘future’ from a superficial perspective but imagining ourselves as being a real part of it. BMW i has further reinforced BMW’s position as a pioneering leader in the automotive world. BMW i plays an important role in our future product strategy in India and as a sign of our commitment to this market.
BMW i, the future of urban mobility, is a far-reaching and ground-breaking concept for sustainable mobility, presenting visionary electric vehicles and networked services, inspiring design and a new understanding of what premium means – strongly defined by sustainability.
BMW introduced the BMW i brand in India in 2015 with the BMW i8. With growing urbanization and increasing environmental challenges, the BMW i8 is a perfect solution to the mobility needs of the Indian luxury consumer living in the upcoming megacities of the country. The car is a plug-in hybrid drive with the heart of a sports car and a mind of a responsible citizen. It burns more adrenaline than fuel with revolutionary BMW eDrive system, innovative LifeDrive Architecture and latest BMW EfficientDynamics technologies.
The intelligent plug-in hybrid system in the BMW i8 combines the benefits of an electric motor and a petrol engine into an extraordinary driving experience: highest efficiency and maximum dynamics are simultaneously possible.
The electric drive, a powerful 96 kW (131 hp) lithium-ion battery, is located on the front axle. The rear axle is driven by BMW TwinPower Turbo 1.5-litre three-cylinder petrol engine with 170 kW (231 hp) of peak performance. The petrol engine combined with the electrical boost of the hybrid system guarantees typical BMW driving pleasure.
The BMW i8 was conceived from the very beginning to meet the demands of a hybrid sports car. A distinctive feature conceived exclusively for BMW i is the LifeDrive vehicle architecture which significantly contributes towards weight optimisation.
With BMW eDrive, the new BMW drive technology, the battery can be charged from any mains socket with a BMW i Wallbox or while driving. A standard accessory, the BMW i Wallbox enables the high-voltage battery to be recharged in less than two-and-a-half hours using a conventional 220 V mains socket.
TDB: With GST, soon to be implemented from July 1, experts say that GST is likely to reduce the cost of car manufacturing in India, due to the subsuming of different taxes levied currently. Will this increase the sales of BMW cars in India? Which models do you think will do well?
VP: BMW has been the fastest to offer Goods and Service Tax (GST) benefits and additional benefits before the official implementation of GST in India. Effective since 20 May 2017, Sheer Driving Pleasure is available at an unmatched value before the official implementation of GST. The combination of enhanced benefits along with GST benefits during the run-up to GST implementation on select models is an irresistible window of opportunity for enthusiasts to fulfil their dreams of owning a BMW.
The combination of additional benefits from BMW India that can be availed along with GST benefits on select models are: Reduced rate of interest of 7.90%, complimentary service and maintenance for 3 years, complimentary insurance for 1 year and assured buyback up to 4 years. The offer will be valid for a limited period or until stock lasts. We are confident that with our offer all the models will have good sales.
TDB: How do you see FY2016-17 shaping up for BMW in India in terms of introduction of new models and sales?
VP: 2016 and 2017 are not easy years for the Indian automotive industry. During the course of the year, the developments in the economic, regulatory and political system shook the very framework and mechanisms of the auto industry. Diesel ban, infrastructure cess, tax on luxury cars, demonetization had a widespread impact on the industry. But, we stand our ground in a fiercely competitive environment with new ideas and the strength to promote our products. We are prepared to meet the challenges head on to ensure our company’s success. We anticipate trends. And we have the right ideas and the courage to make those ideas a reality.
We are well positioned for the future with our strong product portfolio. We will continuously and resolutely expand our product range and thus cover all the opportunities in the luxury segment which are relevant for us. We will continue to launch exclusively authentic luxury products, which are distinguished by their emotional appeal, uncompromising engineering, innovative technology and outstanding quality. According to our approach “Production follows the Market”, we established the BMW India Headquarters in Gurgaon (NCR), a Central Parts Warehouse in Mumbai and the BMW Plant Chennai in Tamil Nadu.
BMW Group has devised bold steps to steer its product offensive in India. The BMW Plant Chennai presently locally produces 8 car models - the BMW 1 Series, the BMW 3 Series, the BMW 3 Series Gran Turismo, the BMW 5 Series, the BMW 7 Series, the BMW X1, the BMW X3 and the BMW X5. From 2018, the BMW Plant Chennai will locally produce 9 car models.
The highlight of the year in the luxury car segment is most definitely the all-new BMW 5 Series. In 2017, we will spearhead our product offensive in India with the all-new BMW 5 Series. The all-new BMW 5 Series is a winner and is our best foot forward in 2017 and was launched in India on 29 June 2017. The all-new BMW 5 Series is the most progressive sports sedan, with outstanding performance in this class.