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The luxury car segment witnessed quite a price war in 2011 and 2012 with companies offering huge discounts to gain customers. BMW which has been the leader in the luxury car segment is challenged by Audi for its position. BMW Group India President Phillip von Sahr accused his competition of 'unprecedented price war' and declared that BMW does not intend to be number one on the basis of discounts. The company in fact raised its prices from January 1 this year. Sahr spoke to Swaraj Baggonkar on the sidelines of the launch of the new 7 Series. Edited excerpts:
How many models has BMW launched this year so far?
This is the second from BMW and third from BMW group. The company launched the (new) X1 in February. Today we have launched the 7 series, our flagship, the best we can offer. This car will now be produced at Chennai and its not the last launch with another one due in September.
After the 7 Series what is upnext?
We will launch something which is on the other side of the spectrum. Its the first premium BMW compact car, its the BMW 1 Series launch in September. So in addition to the 7 Series by end of 2013 we will be producing the 1 Series, 3 Series, 5 Series, the X1 and X3 in Chennai.
Where does BMW stand as of today in terms of sales-wise ranking? Is it still number 1?
We are leaders as the most trusted brand and product range. We have a very good dealer network, we are now 35 dealers and want to expand it to 50 by end of 2014. All this to us in number one. Last year (calendar year 2012) we sold 9,375 cars.
What about January-March 2013 period?
I do not know what other have sold. We release our numbers once a year and we are not volume manufacturers talking about volumes, we are clearly premium luxury car manufacturers.
What volumes does the 1 Series promise?
One the most sold cars nest to the 3 Series and the X1. But despite its compact dimensions it will be a premium car. We are looking at different target groups. We will see how much it sells but we cant say that it will become the largest selling BMW in India.
BMW raised priced in January has there any impact on demand?
Yes, of course there has been an impact. We increased our prices by up to 10 per cent and an average of 5 per cent and we reinvested the amount in dealerships training and brand. We have a training center opening in 2014.
There is a significant slowdown in the mass car market, what impact has the luxury car demand faced?
The actual economic situation has an impact on the luxury car market. The view over the world due to the economic situation is that the luxury car market is not so much suffering but (realty is that) it is suffering. The cake is a little bit smaller.
What is the size of the luxury car market in India?
It was 30,000-40,000 units last year, this is expected to grow in the long term. There are lot of customers who want to upgrade to a luxury car. I do not expect a lot (of growth) from 2013.
You have a capacity of 11,000 units per year at Chennai, will we see an expansion in that?
Right now we are happy with 11,000 units. If necessary we can increase the capacity but more challenging than the capacity is how many different models the plant can produce and there we are happy that six BMW models are being made. We are operating at two shift capacity now and we can go to three shift capacity if necessary.
