German luxury car maker BMW, which is facing stiff competition from compatriot Audi, is looking at introducing a range of products across multiple price points and increasing local assembly to offer vehicles at attractive prices in the Indian market.
The company has slated four new products for launch in the country next year – two of which would be produced locally at BMW’s manufacturing facility in Chennai. Philipp Von Sahr, president, BMW Group India said, “We want to remain the number one player in the luxury car market in India but not at any cost. We will not give discounts on products but rather try to have premium offerings at all price points to bring in numbers. We are increasing local assembly and will produce two of the four new products slated for launch next year at Chennai. While the 1 series will be positioned at the lower end of the price spectrum the new 7 series sedan will debut at the other end.”
Besides, the 1 series and 7 series BMW would also bring in the new X1 and SUV X6 to India. Sahr declined to specify the price points for its first luxury compact car in the Indian market but hinted that it would be tagged lower than SUV X1 which comes upwards of Rs 24.5 lakh (ex-showroom, Delhi).
Luxury carmakers have started gaining a bulk of their sales from entry-level models in recent times. While BMW XI contributed over a quarter to the sales of the company between January and October 2012, Audi registered 1000 bookings for its latest offering theQ3 (Rs 26.71 lakh) within three months of launch. To tap into the potential the segment offers, Mercedes has scheduled the A-Class for launch next year and has indicated that it would bring in products priced sub-Rs 20 lakh over the next few years.
Sahr, however, does not expect demand to revive in the luxury car market in the country in the near future. “We should register some growth in sales in 2013 with our new products. We plan to expand reach by having 50 sales outlets in place by 2014 from the current 29 dealer locations. Some of these would become operational next year bringing in new market chances. But only 2014 onwards can we expect to see strong traction.”
In the meantime, BMW said it would focus on increasing profitability rather than participating in price wars and pushing discounts to boost volumes in the short-term. “Monthly sales are just one parameter (of success). If these discounts continue, it will definitely makes the business unprofitable in India”, Sahr said. The company expects to close the year with sales slightly higher than the 9371 units it had hawked in 2011.
BMW, which has led the luxury car market in India for three consecutive years since 2009, has been facing the heat from Audi. Data available with industry body Society of Indian Automobile Manufacturers (SIAM) show the company sold 5174 units between April and October this financial year, which is a decline of 12% over the 5895 units sold in the year-ago period. Audi, meanwhile grew volumes by a robust 53% to sell 5174 units till October.
On Thursday, BMW launched the new X6 crossover, or 'sport activity coupe'. Imported as fully-built units, it is priced at Rs 78.90 lakh for the diesel and Rs 93.40 lakh for the petrol variant.