India stable, long-term market: BMW

The world's largest premium car maker BMW AG said that India was more stable market than China, despite its retail sales volume in India being only a fraction of its sales in China.

Addressing the Indian media here at the annual Asia Conference, the Group's head of sales and marketing, Stefan Krause, said, "India is a long-term bet with stability, while China is a short-term bet with volatility."

In 2007, the German automobile major sold 61,000 cars in China including its two iconic nameplates, Mini and Rolls Royce, growing at 37 per cent over the sales in 2006.

In India, the company had its maiden assembly year in 2007 and sold 1,387 units between April and December 2007. This includes less than 10 units of Rolls Royce, while Mini is yet to be launched in India.

Despite the small volume in India, the group encouraged by its performance in 2007 said that it was well on its way to overtake its competitor Mercedes Benz India which had sold around 2,400 units in 2007.

BMW had at the time of launching its assembled cars in India towards end of March 2007 had envisaged closing the year with sales of 1,000 units. Peter Kronschnabl, president of BMW India, said that the group managed to surpass the target set for 2007.

The company has now expanded its capacity at its Chennai assembly plant to 3,000 units from the initial level of 1,700 units, with minimum additional investment. In 2008, the company plans to expand its dealer network to 12 from the present nine outlets.

Discussing the company's plans for launching the Mini in India, Kronschnabl said that a decision will be taken in the next two to three months.

The group has completed a survey to facilitate this decision and would soon start the internal process to analyse the viability of launching the Mini in India. Krause added that there have been instances where the group, after several studies, continued to postpone the launch of Mini.

He also said Brazil was one such market. Viability of launching the vehicle will be strongly driven by the response from dealers who need to ready to take up the challenge.

The Mini despite being a small car would cost around Rs 12-13 lakh if sold as an assembled car. This price would double due to Customs duty if imported as a completely built unit. "We need to be convinced (about the viability) before we convince the dealers," Krause said.

(This correspondent is in Tokyo at the invitation of BMW)