Dr. Andreas Schaaf, President, BMW India talks exclusively to B&E on what drives luxury car markers in India and what will be BMW’s next move to stay ahead in this race
Dr. Andreas Schaaf, President, BMW India, who replaced Peter Kronschnabl in May this year, in an exclusive conversation with B&E discusses BMW’s growth strategy for India, its proposed investments and how the company plans to cross the 4,000 mark in sales and sustain the growth momentum in the long run. Excerpts:.
B&E: You recently took over from Peter Kronschnabl as BMW’s India head. How do you plan to take the things forward from here for the company?
Dr. Andreas Schaaf (AS): 2010 onwards we have decided to focus at the leadership position in the Indian market, not only in terms of sales but in everything we do. Further, we have decided to stand our ground in a fiercely competitive environment with new ideas and the strength to promote new products. Given the huge untapped growth potential that Indian market offers, BMW is confident of increasing its sales in the domestic market. With 3,301 cars delivered to customers till August 31, 2010, the sales numbers have already grown significantly by over 40% over the last year. In fact, BMW has now embarked on the second wave of its growth strategy for India. Considering this, we have already started our strategic realignment and are now charting the right course for the future. Moreover, we have put into action several projects that will pay off in the long run.
B&E: Luxury car market in India is still at a nascent stage. What kind of growth do you actually see here?
AS: We are very bullish on the Indian market. In fact, the luxury car market in India has already grown by over 60% this year, which is phenomenal. I cannot predict the future, but I don’t see any reason why the future growth in the segment shouldn’t be in double digits. This is precisely the reason as to why we have set up our India strategy.
B&E: In light of burgeoning market opportunity how do you see the competition shaping up in the luxury car segment in India?
AS: Since its inception in 2007, BMW India holds a position of strength. The company has achieved market leadership in the luxury car segment in India. Though the period between 2007 and 2009 was demanding for BMW India, at the same time it can be termed as the most successful market entry for BMW. In fact, initiatives taken up during this period have provided BMW a solid foundation in India – a necessary ingredient for success in any country.
B&E: Do you emphasize more on market expansion or is it the profitability that drives you?
AS: Both are important in a growing market where customers are increasingly having the resources which grant them access to premium products. In such a scenario one should focus on volume expansion as it is a measure of profitability and goes hand in hand with expansion. So, I don’t think that there is a contradiction between the two.
B&E: This year, not only have you done exceptionally well in the executive segment but your performance has also been good in the premium and luxury segment. What do you plan to achieve by the end of this year? And what are your plans with respect to dealerships and service network?
AS: We gained segment leadership last year only to realise that BMW did a tremendous job in setting up the company across all premium verticals. We are already No.1 in India and I have no intention of losing the numero uno spot. As of today, we have 18 BMW dealer facilities across the country. Now, as we embark on the next phase of our Dealer Network Strategy, BMW India will expand operations to a total of 22 outlets by the end of 2011.
Dr. Andreas Schaaf, President, BMW India, who replaced Peter Kronschnabl in May this year, in an exclusive conversation with B&E discusses BMW’s growth strategy for India, its proposed investments and how the company plans to cross the 4,000 mark in sales and sustain the growth momentum in the long run. Excerpts:.
B&E: You recently took over from Peter Kronschnabl as BMW’s India head. How do you plan to take the things forward from here for the company?
Dr. Andreas Schaaf (AS): 2010 onwards we have decided to focus at the leadership position in the Indian market, not only in terms of sales but in everything we do. Further, we have decided to stand our ground in a fiercely competitive environment with new ideas and the strength to promote new products. Given the huge untapped growth potential that Indian market offers, BMW is confident of increasing its sales in the domestic market. With 3,301 cars delivered to customers till August 31, 2010, the sales numbers have already grown significantly by over 40% over the last year. In fact, BMW has now embarked on the second wave of its growth strategy for India. Considering this, we have already started our strategic realignment and are now charting the right course for the future. Moreover, we have put into action several projects that will pay off in the long run.
B&E: Luxury car market in India is still at a nascent stage. What kind of growth do you actually see here?
AS: We are very bullish on the Indian market. In fact, the luxury car market in India has already grown by over 60% this year, which is phenomenal. I cannot predict the future, but I don’t see any reason why the future growth in the segment shouldn’t be in double digits. This is precisely the reason as to why we have set up our India strategy.
B&E: In light of burgeoning market opportunity how do you see the competition shaping up in the luxury car segment in India?
AS: Since its inception in 2007, BMW India holds a position of strength. The company has achieved market leadership in the luxury car segment in India. Though the period between 2007 and 2009 was demanding for BMW India, at the same time it can be termed as the most successful market entry for BMW. In fact, initiatives taken up during this period have provided BMW a solid foundation in India – a necessary ingredient for success in any country.
B&E: Do you emphasize more on market expansion or is it the profitability that drives you?
AS: Both are important in a growing market where customers are increasingly having the resources which grant them access to premium products. In such a scenario one should focus on volume expansion as it is a measure of profitability and goes hand in hand with expansion. So, I don’t think that there is a contradiction between the two.
B&E: This year, not only have you done exceptionally well in the executive segment but your performance has also been good in the premium and luxury segment. What do you plan to achieve by the end of this year? And what are your plans with respect to dealerships and service network?
AS: We gained segment leadership last year only to realise that BMW did a tremendous job in setting up the company across all premium verticals. We are already No.1 in India and I have no intention of losing the numero uno spot. As of today, we have 18 BMW dealer facilities across the country. Now, as we embark on the next phase of our Dealer Network Strategy, BMW India will expand operations to a total of 22 outlets by the end of 2011.
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
and Arindam Chaudhuri (Renowned Management Guru and Economist).
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