BMW India expects double-digit growth in 2023, chip supply a challenge

BMW’s car sales were up 5 per cent in the first half of this year over continuing logistical challenges and semiconductor chip shortage, but the company expects to post a strong double-digit growth for the full calendar year, its India president Vikram Pawah said on Tuesday.  

The German company plans to launch seven car models in the second half of 2023, he told Business Standard. In the first half of 2023, the German company sold 5,867 cars and saw its motorcycle segment grow 50 per cent to 4,667 units, said Pawah. 

The company continues to have a strong order book in India of 2,500 cars and 1,500 motorcycles. “We will have a very solid double-digit growth in 2023. We have done this in the last two years. We will continue to do that and also have a record year again,” he said.

Pawah said that the first four months saw some impact over supply snags. “We had some restrictions due to some logistical challenges and semiconductor supply situation at the end of last year and that carried on through the first four months of 2023 as well,” Pawah said at the company’s office in Gurgaon.

BMW’s supply chain in India reached some normalcy from May onwards. “If I look at the two months of May and June 2023 and compare it with last year’s corresponding months, we have registered a 32 per cent growth in cars,” he said.

Pawah mentioned that the company’s sales via online channels had increased from 15 per cent last year to about 21 per cent now.

“We started online sales much before the Covid-19 pandemic. We were one of the pioneers in starting online sales in the auto industry. This system became more robust during the pandemic,” he said.

“We had best ever online sales (for cars) in the first half of 2023 at about 21 per cent. This number was 14-15 per cent in the H1 of 2022.”

The company expects one-third of its sales to come from the online channel in the coming years.

The semiconductor supply for BMW has not become fully normal but it is better than last year. “The bigger challenge right now is not the semiconductor shortage. It is more about the logistical challenges. If you look globally, the availability of ships and containers, and the delays of inland transport within the countries — that is causing more supply-chain issues,” Pawah said.