India’s affinity for luxury cars is on the rise, and BMW India is no exception. In the first nine months of 2023, BMW achieved its best-ever year-to-date sales, with over 9,580 cars and 6,778 motorcycles sold. Notably, the company dominates the luxury electric car market, capturing a 50% market share and have sold over 1,000 units so far.
While maintaining leadership in the EV segment, BMW is actively expanding its presence in the premium luxury segment. This strategic move aims to secure the top position in the overall luxury car market, bolstered by leading segments like the entry-level SUV X1. In the Q3 of the ongoing calendar year, BMW India inches closer to the market leader, as per the data by Vahan portal. In a comprehensive interview with ETAuto, Vikram Pawah, President of BMW India, outlines the company’s key strategies in terms of products and electrification.”
Edited Excerpts
Q: How has been BMW India’s performance in Q 3, in the overall first nine months of 2023?
In the first three quarters of 2023 BMW India has been riding the growth wave after a fantastic 2022 record. The first half of 2023 was a record for us as well. Q 3 is the best we’ve ever had so far. We broke the record for the best ever monthly sales in September in our 16 years of history. The Q3 growth for the car segment was 17% and overall growth was10%. We are having solid growth and robust demand. We still have a long waiting period because our supplies have just started in Q3 though we did all the launches in Q1, Q 2 was the ramp up phase. Supply starts in Q3 and we expect a very solid, festive season.Q: Thus it is going to be a very strong year-end. But what is driving this growth, the key factors?
Fundamentally, India is in a very solid situation now. The domestic demand is quite strong. I think inflation is under control.
The overall economy has got a positive sentiment. That’s one clear factor, from an overall economic point of view, that drives the demand for great products. The development of infrastructure is really helping the way the road network is expanding. Every week, every month, you can see a lot more avenues for you to enjoy great cars. That’s the macroeconomic factor supporting our growth.
At the micro level, there are a couple of things that are working really well for us. In the past 18 to 24 months we have been doing a great product offensive with several new launches of cars and bikes. This year we plan to launch 25 products, 22 cars and 3 bikes. Of these we have already launched 16 cars and 3 bikes.
Another key factor to our advantage, I think, is the kind of products we are launching. To answer the question where is this growth coming from for us, I will start from the top end of our portfolio, usually referred to as the luxury class, which includes the 7 Series and the X 7.
That has been growing by 102% this year. Really solid and robust growth, again, driven by the great product that we launched with the new 7 series and the i7. It is redefining a class in luxury and is a benchmark model. If you are looking for a luxury limousine, I don’t think any other car competes with it. The X7 has always been a very solid performer for us. With the improved supplies, we can see robust growth in that as well. Sales of the X 7 are doubling.. These two make one of our growth areas helping us grow faster.
The second part is from SAVs, the Sports Activity Vehicles (SAV). Overall, SAVs are contributing to 56% of our growth. Within that also, we have all the way from X1 to X7 now.
We are also now addressing the market for electric vehicles (EVs). That is the new area. So we are leaders in EVs right now with 50% market share in the premium segment.
The highest selling model of electric is iX, which is a full size SUV. With the launch of iX1 last week, we have five distinct products in electric, the widest portfolio that anybody has in the industry: From an entry level hatch to an entry level SUV, all the way to a full blown SUV and a full blown limousine, the i7. We were the first one to bring the electric luxury cars. We have five distinct electric products that are available now. Demand for all these products is really strong and that is also driving growth.
Q: It is interesting to know that you have silently captured about 50% of the electric luxury market. What has worked in terms of strategy? How did things look on the ground?
Of course, it is not that you just launch the product and suddenly it works. It is never like that. There’s a proper thought process that’s gone into it over the past two years. One thing was that we were always confident that India would be a very solid electric market.
I don’t think everybody would have believed that when we said that two years ago. But we started preparing almost two years ago internally as a company, not only in making sure that we bring the products in, but also making sure that our organization and dealer network are ready to electrify the fleets. So we worked in advance.
If you look at it, we set up an entire charging network across our dealerships in 35 cities, the fast-charging DC chargers. We set them up much before we started sales of the electric.
That was the first thing we did. We made sure all our technicians and all our sales team were trained about the nuances of electric. And to help people address the range anxiety, every product of electric that we sell comes with a private charger.
We give a wall box which can be installed either at home or at the office, wherever the customers spend most of their time. And that makes sure that they are not dependent on a public charging network.
On top of that, all our dealerships have fast DC Chargers, 50 kW DC chargers. You can top up your car for 100 km while you’re having a coffee.
And these charging networks are accessible to anyone, any electric car owner 24×7. They are placed in such a way that they can be accessed by anyone.
Q: When you say you have five products right now, what is your electrification strategy from the mid-to-long term for India?
Clearly our target is that we will continue to lead this area fully. We will continue to make sure that we are leaders in the premium space in electric first, offering the best portfolio. We’ll always make sure that we have the widest portfolio for people to choose from.
Second, we will continue to lead as we are today, with the charging infrastructure as well. The next step that we are doing at the moment is to try to set up some destination chargers as well, in addition to our dealerships on our own, so that people can feel comfortable that there are charging infrastructure available.
Q What will be your touch points for this?
We are still in the planning stage, but we aim to have at least 200 of them across India over a period of time. Then, we will ensure that we continue to bring more and more electric products.
By the end of this year, we will have about 13 electrified products in our portfolio worldwide. We’ll make sure that most of them are brought to India as soon as they’re launched.
Q: What percentage of sales comes from the different EVs, and going forward, what would it be?
When we are capturing 50%, from a demand side, it’s already at 10%. And as our supplies are improving, it’ll reflect in our sales. I expect the demand to be around 15% next year, and I think it’ll grow to 25% by 2025.
iX is the best-selling premium electric vehicle in the country. In our portfolio also, it’s the best-selling electric, but not in terms of the entire portfolio. The best-selling electric is a mixture of iX, i4 and even the i7, all our best sellers. So there are three different segments that are best sellers. We have a very balanced distribution of sales within our segments.
Q: You now have the widest portfolio of luxury cars in the country and you are very close to the market leader according to the Vahan data. What is your plan to lead in the segment as well?
I’ve always said that our strategy is to grow the premium segment and by growing we’ll become the leader. And I think we are showing that. If you look at it, BEV is a new trend and it leads to growth. It is not any cannibalization. It’s actually leading to growth of the premium segment very fast. Similarly, the entry level SUVs, for example the X1, is clearly leading to the growth of the segment that we can see because we can see the number of buyers that come for X1. More and more of them are the first time luxury buyers. That’s again a clear indication of growth.
We’re already leading in X1, we’re already leading in the best segments. So once we start leading in the growth areas, the growth will lead us to a full market leadership as well.
I won’t put a timeline for it, but it’ll happen fairly soon. You can see this on Vahan and you’ll see how close we were in Q3 numbers. It’s just a matter of time. But that’s not our target, our target is to grow the premium segment which is fairly small.
Q: What is your view on the direct to customer model? How BMW is preparing the dealerships in India for digitalization that is happening across the world?
One thing is very clear. At BMW we’ll continue to make sure the dealers are an integral part of our sales network. We clearly believe that a local dealer is a big value-add for our customers.
So we have no plans to go for D2C. We will continue with our dealer network.
Our investments in the dealer network continue to grow. So we have 80-odd touch points across the brands and we’ll end up having 100 of them over the next 18 months.
Q: What is the percentage of localization of EVs being sold now?
We have no local EV now. They’re all imported. We started only 18 months ago, roughly. Localisation of EVs will happen with time. It’s just a matter of time. Everything is sold out at the moment. One milestone we crossed recently was selling 1000 premium EVs.
Q: What is the contribution of tier-I and tier-II cities in this?
We don’t look at it from a tier perspective. What we talk about is that 50% of our sales come from the top ten cities in the country and the balance 50% comes from the next hundred.
Q: You’re working in other international markets. How do you see India’s long term prospect as a luxury car market?
The biggest growth story in the world will be in India in any respect, not just in the luxury car market. I’ve said it very clearly, that this is the decade and century of India. In the luxury car market also there will be absolute growth.
