BMW to invest Rs 130 crore to rev up its India business

German luxury carmaker BMW is investing another Rs 130 crore in India to enhance its operations, taking its total investment in the country to Rs 1,250 crore.

In a bid to strengthen its product portfolio, the company will launch the new version of its locally manufactured 5 Series sedan on June 29, production of which began earlier this month at the Chennai plant. Another model, the 6 Series Gran Turismo (GT), will be launched in India next year and also locally produced.

The 5 Series has been the company’s best-selling model in India. Since 2007, BMW has sold around 66,000 vehicles in India with the 5 Series having contributed close to 30 percent of total sales. "Next year, we will be introducing another model in between 5 and 7 Series, called the 6 GT and that would again define a new segment and create new market for us," said Pawah.

At present, the BMW Plant Chennai locally produces eight of its 16 models. These comprise the 1 Series, 3 Series, 3 Series Gran Turismo, 5 Series, 7 Series, X1, X3 and X5. BMW dealerships also display the X6, Z4, M3 sedan, M4 Coupe, M5 sedan, M6 Gran Coupe, X5 M, X6 M and i8 which are available as Completely Built-up Units.

"Since 2007, we have been consistently investing in India. This year, we are going to increase our investment further to up to Rs 1,250 crore on a cumulative basis," BMW India president Vikram Pawah told PTI. The carmaker has invested Rs 1,120 crore in the Indian operations thus far.
The new investment will go into BMW group operations, including Motarrad (two-wheeler business) as well as the financial services arm, he added. 
With the fresh investment, the total investments on BMW Group operations in India will go up to Rs 520 crore and on BMW Financial Services to Rs 730 crore. The company is also looking to expand its dealer network in the country. It currently has 18 partners and is present in 30 cities. "We have 63 touch-points. Out of these, we have 41 sales outlets. We want to take these 41 outlets to 50 by 2018," said Pawah.
In other emerging towns, in addition to 30 major cities, the company utilises its 'Mobile Studios' to expand the market further. This year, the weather-proof BMW mobile studio will cover 50 towns, Pawah said.

Looking to recover lost ground

BMW clearly is looking to recover lost ground in the competitive Indian luxury car market. The company, which notched its best-ever sales in India in 2012 (9,375 units), lost its crown first to Audi India in 2013 and later to Mercedes-Benz India in 2015. In 2016, BMW India sold 7,861 units, a year-on-year growth of 14 percent. In the January to May 2017 period, it has sold a total of 3,533 units which marks eight percent growth year on year.     
Pawah further said the company would be focusing on its ‘Power to Lead’ strategy to grow the entire premium car market. "The idea is to grow the segment. Currently in India, premium car segment remains less than 2 percent of the total passenger vehicle market as compared to 5-10 percent in various countries," Pawah said. The efforts should be to at least make it 5 percent and eventually 10 per cent of the PV market, he added.

The luxury passenger vehicle market in India, estimated to be around 35,000 units per annum, should see a rise in customer demand following implementation of GST. With maximum duty reducing to 43 percent from 55 percent at present, there is likely to be a surge in consumer demand for luxury cars and SUVs.

Also read : BMW India starts production of new 5 Series