Philipp von Sahr, President, BMW Group India The youngest among the German ‘Big Three’ – BMW – is also the strongest, with over 1.6 million units global sales last year. But with Audi and Mercedes-Benz relegating it to the No.3 position in India, the job of the President, BMW Group India, is not enviable. To know more about his strategy to reclaim the crown in India, The Dollar Business caught up with the man on the hot seat, Philipp von Sahr. Excerpts from the conversation:

Neha Dewan | @TheDollarBiz

TDB: BMW India seems to be losing out to Audi and Mercedes-Benz with a 22% drop in sales last year. What do you think was the reason and what is your strategy to undo this trend?

Philipp von Sahr (PVS): BMW India witnessed an unprecedented price war from competition for market share of the Indian luxury car segment. But, we have made our price decisions with all due care and consideration. They will pay off in the long run, in terms of profitability and growth. We want to increase our sales volume, but not at any price. We don’t want to be No.1 in discounts. Unlike our competition, we will not venture into the Indian luxury market with discounted cars. Seen in this light, we have charted a distinctive course that defines not only what we do and how we do it, but also what we won’t do. The difference is decisive. The choice is of being a volume leader or a brand leader, being premium or ordinary, and from leading in customer acquisition to leading in customer satisfaction. It is the difference between being pushed and making your own way, between imitating and pioneering, between quick results due to short-term actions and the lasting success generated by your own strength. We have decided to stand ground in a fiercely competitive environment with new ideas and the strength to promote our new products. BMW India has started its strategic realignment. We are charting the right course for the future. We have put into action numerous projects that will pay off in the long term. Everything we do, we do with conviction. We have the right ideas, as well as the entrepreneurial courage to make those ideas a reality. BMW is a very successful luxury brand in India.

We want to achieve further growth with our brand. We want to strengthen the distinctiveness of our brand. Drivers of premium cars want to differentiate themselves. We intend to meet all those needs. We strongly believe this trend is here to stay – and our business, therefore, has to be designed to offer that exclusivity to our customers. Focus on customer satisfaction will prove to be the key differentiating factor between us and the competition now and in future. Moreover, one should not ignore the fact that BMW India has left behind its competitors by ranking highest in sales satisfaction and customer service in the Indian luxury car segment in both J.D. Power Asia Pacific Sales Satisfaction and Customer Service Index Study 2013.  

 
TDB: Last year, you started the production of MINI Countryman in India. Is there any plan to manufacture newer models at your Chennai plant?

PVS: Currently, we locally manufacture BMW 1 Series, BMW 3 Series, BMW 3 Series Gran Turismo, BMW 5 Series, BMW 7 Series, BMW X1 and BMW X3 at our plant in Chennai. BMW dealerships display BMW 6 Series Gran Coupe, BMW M6 Gran Coupe, BMW Active Hybrid 7, BMW X6 and BMW Z4, which are available in the country as completely built-up units. BMW 6 Series Individual and BMW 7 Series Individual can also be ordered as completely built-up units. In 2014, we will launch BMW M3 Sedan, BMW M4 Coupe and BMW M5 Sedan as completely built-up units. Taking a step forward in sustainable mobility, we will also introduce BMW i8 in India this year.

TDB: German cars enjoy a premium image and are considered much superior to Indian brands. Have you ever felt that manufacturing your cars locally might dilute that image?

PVS: BMW vehicles are distinguished by their highest standards of quality, brilliant workmanship and uncompromising engineering. BMW follows the highest international standards of production at all its facilities. BMW production is characterised by people that consider quality not only as a task, but as the first and foremost attribute. Each and every vehicle that rolls out of our plant in Chennai passes through extremely stringent quality testing procedures. As a global company, the BMW Group operates 29 production and assembly facilities in 14 countries. There is no difference in quality standards of a BMW vehicle rolling out of our Chennai plant or any other BMW production facility, anywhere in the world.

TDB: Can you give us a sense of the kind of investment done by the BMW Group in India till date? What can we expect over the next five years?

PVS: With its three brands – BMW, MINI and Rolls-Royce – the BMW Group has its sight set firmly on the premium Indian automobile market. Along with our automotive concerns, our activities in India also include the marketing of motorcycles, as well as financial services for the premium clientele. Headquartered in Gurgaon, BMW India is a 100% subsidiary of the BMW Group. The wide range of BMW activities in India include the establishment of a manufacturing plant in Chennai, a parts warehouse in Mumbai and development of a dealer organisation across major metropolitan centres of the country. Till date, the BMW Group has invested over Rs.3.9 billion in the Chennai plant. BMW Financial Services India operates with three business lines – Retail Finance, Commercial Finance and Insurance Solutions (through cooperation partners). Services offered through BMW Financial Services are significantly valuable to the premium clientele, who require exclusive and flexible financial solutions. Service excellence is the primary focus of operations across all business lines. Till date, the BMW Group has invested Rs.5.3 billion in BMW Financial Services India. Going forward, BMW India will aggressively expand its sales channel network by increasing the number of sales outlets to 50 across major metropolitan centres and emerging markets in India.

In order to have greater customer intimacy, BMW India will enhance competency levels throughout the value chain. We recently opened a one-of-a-kind training facility in Gurgaon. A benchmark amongst all BMW training centres worldwide, it is built on 2.2 acres of land and has the resources to provide training for all BMW Group brands in the market.

BMW i8 has the heart of a sports car and the mind of a responsible citizen - Philipp von Sahr, President, BMW Group India

 
TDB: How do you see FY2014-15 shaping up for BMW India in terms of sales?

PVS: BMW is well positioned in the Indian market with the most desirable product portfolio across each price segment in the luxury car market. The DNA in all our cars is synonymous with ‘Sheer Driving Pleasure’ and the power of technology and innovation. BMW will strengthen the momentum of its brand strategy in 2014 by spearheading ‘Sheer Driving Pleasure’ with powerful letters like ‘M’, ‘X’ and ‘i’. These three letters will further propel BMW as the most aspirational luxury automotive brand in India. ‘M’ stands for a unique philosophy of driving pleasure – high performance, sophisticated sporting flair and aesthetics. ‘M’ defines the supremacy of motorsports. The all-new BMW M6 Gran Coupe has already been launched and the upcoming M models including the new BMW M5 Sedan, the all-new M3 Sedan and the all-new BMW M4 Coupe will propel the power of ‘M’ on the Indian roads this year. BMW has always been the pioneer in creating new segments in the automotive world. The Sports Activity Vehicle (SAV) segment was created by BMW and ‘X’ vehicles are known for superior dynamic performance on the road and outstanding traction on rough terrain. This year, the new BMW X3 and the all-new BMW X5 will guarantee a new driving experience in the premium SAV segment.

The BMW X5 will be locally-produced at our Chennai plant. But the main highlight of 2014 will be the introduction of BMW ‘i’ in India. ‘i’ stands for visionary electric cars and mobility services, inspiring design and a new understanding of premium that is strongly defined by sustainability. BMW is ready to get the future of mobility to the Indian market in shape of the BMW i8, a plug-in hybrid drive that has the heart of a sports car and the mind of a responsible citizen. As a prequel to this, BMW India has recently launched the all-new BMW 7 Series Active Hybrid in India. So far, the new launches of 2014 have received tremendous response across all our dealerships in India. Our customers are very excited about our latest offerings. We are confident that the new offerings will establish a new benchmark in the Indian luxury car segment.