Bavarian luxury car-maker BMW India, which has been selling its premium cars for over a decade, will continue with its strategy for the subcontinent—keeping its plans on track for new launches in its range of two wheelers, the MINI brand of cars, as well as its BMW models.
BMW India has, in recent months, brought in new segments that expand the company’s offerings at the lower end of the price spectrum. That’s in addition to the tried and tested strategy of tapping customers who buy its 3 Series, 5 Series, and the X-range of SUVs that drive the bulk of its volumes in the market. And while the company doesn’t share all its plans for the future, executives note that tapping niche segments that cater to customers across established categories will be part of the drill.
As an example, BMW recently launched a new 6 Series GT geared for self drive over long distances. Vikram Pawah, President and CEO, BMW Group India, says that they have 28 new launches lined up for the year—from new models and upgrades to products in the lifestyle space. These will include 15 launches for the BMW range, five for the MINI, and eight new products for Motorrad, the two-wheeler brand.
Will electric be a prominent part of their future rollouts? Pawah says, “We have a clear strategy of choice on what powers your choice fuel wise—and the i4 will follow soon when the ecosystem evolves”. That comes despite the slump seen over the past of couple years. “Going back several years for such a large sector is a setback for the sector and the economy, and now, with the second pandemic phase around the corner, that may further reverse growth,” he said, adding that industry-wide measures would be required soon.
Presently, the luxury auto sector is in recovery mode, given that the last year saw overall sales for the segment come in at 19,000 units, down by almost 50 per cent from around 38,000 units in 2018, according to IHS Markit and industry sources.
The Centre should either revise taxes downward or offer incentives for a short term boost for consumers, Pawah noted, “The auto scrappage policy, for example, doesn’t do very much for the consumer, as sales hover at levels that are comparable to 2016”.
The luxury car market has witnessed significant pressure over the last year with a number of consumers shelving plans for purchases until the economy settled down. For most luxury manufacturers, stability of policy and regulation impacts the planning of car launches, which are typically set out six-seven years in advance, Pawah said.
While recent events have had their impact, fresh and refreshed model launches indicate that the luxury carmakers are upbeat on growth prospects, said Suraj Ghosh, principal analyst, South Asia Powertrain Forecasts, IHS Markit. “In the short term, the segment is expected to have a subdued run... The penetration level of luxury cars is still low despite the growing number of HNIs, which is a unique phenomenon,” he observed.
Recently, government officials had spoken about the potential of infrastructure becoming like that of modern, western nations over the next three years. “If that happens as scheduled it will make a difference and encourage the experiential element of driving luxury and performance cars, but regulation, of course, has to keep (up with) that,” Pawah pointed out. “The latent potential is fantastic in India if the per capita income increases... which will happen at some time,” he added.