German carmaker BMW is seeing an increase in its certified used car business along with an increase in demand for its electric cars, due to the increasing demand for luxury cars in India.
Vikram Pawah, President and Chief Executive Officer, BMW Group India spoke to businessline on the demand for its SUVs, next-generation BMW 7 series, boost in localisation, and consumer preferences.
Edited excerpts:
SUVs are in demand among Indian consumers. Has BMW also witnessed an uptick? Will consumers prefer the next-generation BMW 7 sedans?
We are seeing a rise in demand for SUVs and it was up by 62 per cent. At the same time, we are also witnessing a rising demand for our sedans and limousine as well.
The 7 series is an example that certain customers want traditional comfort at the rear. Consumers at entry level prefer more performance and features but as they move ahead they prefer luxury and the present ratio between SUVs and sedans is 50:50.
How is the demand for electric cars for 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 per cent and India will be close to that. We are creating a private charging network between our customers and dealer network.
We have a fast charging network in 32 cities and with every car. We provide a home charging station that allows you to charge at home or in the office. All our dealers have fast chargers. The newly launched i7 electric has a range of 625 km. If the usage is 44 to 60 km, then one will have to charge the car only once a week.
Do you plan to increase local production further ahead of 98 per cent? Will electric cars be also manufactured locally?
For every new model we launch, the main selling model will be localised. 100 per cent localisation will not be possible because of certain niche models. There are no plans to localise electric cars as of now.
What is your expansion plan for the retail network in 2023?
We plan to expand the retail network this year and add six touchpoints. At present, we are at about 80 touchpoints and last year, we added three.
How is BMW’s used car business in India doing?
We are seeing a huge uptick of customers in our certified used car business. If we sell 12,000 units in a year, we almost get 10 per cent sold in addition to the used car business.
The demand is high which is not unpredictable. If the new car supply is low, then the used car demand will go high. The valuation of used cars is going up which has created more equity for our customers. This is also a reason that customers are changing cars.
Will there be supply chain challenges in 2023 for the industry?
There have been delays and the challenges in the supply chain are not going to disappear but we are managing and adapting. In 2022, we had the plan to deliver a certain volume in India and we exceeded that.
BMW extended its partnership with TVS to bring in new technology, electric and hybrid bikes. How is it going?
In 2023, we need to supply the demand we created with the 310RR that was launched last year. We have a backlog of 1,500 and need to satisfy the consumers. Motorrad and our core bikes will grow this year.