German carmaker BMW is seeing an increase in its certified pre-owned car business along with a rise in demand for electric cars, due to the growing demand for luxury cars in India.
Vikram Pawah, Chairman and Chief Executive Officer, BMW Group India spoke to business line about demand for its SUVs, the next generation of the BMW 7 Series, increased localization and consumer preferences.
SUVs are in demand among Indian consumers. Did BMW also witness the takeoff? Will consumers prefer the next generation of BMW 7 sedans?
We are witnessing an increase in the demand for SUVs and it has increased by 62 percent. At the same time, we are witnessing an increasing demand for our sedans and limousines.
The 7 Series is an example of certain customers wanting traditional rear comfort. Entry-level consumers prefer more performance and features, but as they progress, they prefer luxury and the current ratio between SUVs and sedans is 50:50.
What is the demand for electric cars for the BMW Group in India?
We launched three models in 2022, and the fourth model was introduced this year. The demand will increase and our global target is 15 percent and India will be close to that. We create a private charging network between our customers and a network of distributors.
We have a network of fast chargers in 32 cities and next to every car. We offer a home charging station that allows you to charge at home or in the office. All our retailers have fast chargers. The newly launched i7 electric has a range of 625 km. If the usage is 44 to 60 km, then the car will only need to be charged once a week.
Do you plan to further increase domestic production by 98 percent? Will electric cars be produced locally?
For every new model we launch, the main sales model will be localized. 100 percent localization will not be possible due to certain niche models. There are currently no plans to localize electric cars.
What is your plan to expand the retail network in 2023?
This year, we plan to expand the retail network and add six touch points. We currently have about 80 touch points, and last year we added three.
How is BMW’s used car business faring in India?
We are seeing a large increase in buyers in our Certified Pre-Owned Car business. If we sell 12,000 units a year, we will almost get 10 percent of the sales with the used car business.
Demand is high, which is not unpredictable. If the supply of new cars is low, then the demand for used cars will increase. Used car valuations are rising which has created more capital for our customers. This is also why customers change cars.
Will there be supply chain challenges for industry in 2023?
There have been delays and the supply chain challenges will not go away, but we are managing and adapting. In 2022, we had a plan to deliver a certain amount in India and we exceeded that.
BMW has expanded its partnership with TVS to introduce new technology, electric and hybrid bikes. How’s it going?
In 2023, we have to meet the demand we created with the 310RR that was launched last year. We have a backlog of 1500 and we have to satisfy consumers. Motorrad and our basic motorcycles will grow this year.