Companies

BMW is not bogged down by short-term volatility: CEO

G Balachandar Chennai | Updated on August 29, 2019

Rudratej Singh, President and CEO, BMW Group, India. Photo : Bijoy Ghosh To go with Balachander's interview   -  Bijoy Ghosh

‘Prices of our products will be higher by 5-7% across the range from April 1, 2020’

German luxury car maker BMW has been managing the slow down in the luxury car industry better than others. The company claims to have garnered share in this shrinking market and is confident of maintaining it. Rudratej Singh, who took charge as the President and Chief Executive Officer of BMW Group India on August 1, spoke to BusinessLine about the luxury market, changing mobility landscape and the brand’s growth plans. Excerpts:

How has been the calendar year for the luxury car market in general and BMW in particular?

We are doing better than everyone else. While the industry volumes have shrunk by double digit, our decline was just four per cent during the first half of 2019. So we are significantly better than the industry and have gained market share too. We will not only hold our increased segment share but improve it over a period of time. In the next 18-24 months, if we continue to do what we are doing, which is about building the brand and selling the products, we will also get segment leadership.

What has helped you to manage the slowdown better than others?

We have opened three fronts at the same time — product, market and brand. We have launched a spate of world class products in the last two years. We will be ready with BS-VI.

But BS-IV will be an opportunity for the customers to get a fresh set of products at a price which is more aggressive now than what could be post-BS VI. Prices of our products will be higher by at least 5-7 per cent across the range from April 1 next year.

Under the market offensive, we are expanding despite the contraction in the market. We are happy and proud to say that our current dealers are also participating in this expansion, which shows the robustness financially and the confidence in the business in the long term.

Our plan is to expand dealerships to 50 from 38 in a year’s time.

When you build an ecosystem, people move from functional comparisons to an emotional narrative. Our BMW ecosystem of Joy festivals, M Track Days, xDrives, Golf sport events and engagements are very local and nuanced experiences in art, culinary in all of that. So, this offensive is a very important part of our strategy. We will over invest in this in the next few years.

What do you have to say about the current slowdown?

We are agnostic of short term volatility in consumer sentiments. We are committed and convinced about the long term growth in India and we want to participate in that. We don’t get bogged down by the short term volatility, which is part and parcel of the growth that India will see. If any company or brand wants to be part of the India growth agenda, it must recognise that business unusual will also be business as usual. Also, we have to collaborate on policy with the government. I think the government has done its bit in the short term to help facilitate sentiments. But the industry’s job is not only to be concerned about capacity under-utilisation, it is also their job to create demand. I think there has been too much conversation about the slowdown. But adequate steps have not been taken to create demand from a brand point of view.

Do you witness any change in ownership or mobility patterns?

Mobility is entirely transforming and our role is to follow where the customers will go into the future rather than expecting them to follow the current established norms of ownership or the products or the way we sell. It will change but it will not impact us today. Models of ownership will have to be looked at differently and models of usership will also have to be looked at differently. Shared mobility is not going to be just Ola and Uber, there will be different dimensions to that and we have to watch that carefully. For the short term, the government has clarified on ICE and other evolving technologies. It means that the current industry the way it stands is not going to be disrupted. But we will have that space and time to evolve.

Which are some of your fast-growing products in India?

For us, it is well-balanced. Our 3 Series make up 30-odd per cent of our volumes and X1 another 30-odd per cent. The remaining portion straddles the super-premium to entry-premium.

Published on August 29, 2019

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