BMW Group India sells 11 car models, mini cars, and Motorrad motorcycles, in addition to operating a plant in Chennai, a parts warehouse in Mumbai, and a training centre in Gurugram. Rudratej Singh, the fifth president and chief executive officer, tells Pavan Lall that sales in the next three months will decide the fate of the luxury and premium car segment for the next couple years. Edited excerpts:
Given the overall guidance we are hearing on economic conditions, how do you see the year ending for what is categorised as the luxury segment of automobiles?
Overall as we see it, the segment has shrunk by between 20 per cent and 25 per cent. Last year, we sold a little over 10,000 BMW cars. We have a manufacturing capacity of around 14,000 units annually but expect to see volumes down by over 20 per cent this year.
You have launched new 3 - Series, a new SUV this year. How is it driving sales momentum, despite the structural and regulatory changes that are impacting the industry on a wholesale basis?
We will see headwinds in Diwali but the next three months will be more decisive if the trend continues. It will go on to determine how sales and overall performance for our sector will perform in the next couple of years to come. The bottom line is it’s now up to the OEM to create demand.
Today a new BMW is almost 50 per cent more expensive than what it was just six or seven years ago. So how do you expect new customers to flock to you?
Almost 50 per cent of what a consumer is paying is going towards taxes. The other point is there are two categories of customers — the deeply aware purist who is all aware of global trends and understands quality at a DNA level. The other is the first-time customer who is more on the aspirational side and we see accounting for a larger consumer bucket. That’s the group we are targeting. Getting more people is key to our expansion.
Do you see discounting and de-contenting cars to drive market share and volumes as a possibility?
On a segment level, BMW is doing well and we don’t see benefits in commoditising luxury for the industry. We are really in the business of making people feel good about themselves.
In India, however, celebrating success or milestones is looked upon with skepticism and that’s a cultural nuance that will hopefully change with time. In small ways it is happening.