“In India, the size of the luxury segment is quite small compared to the number of wealthy people. We see a lot of potential because of that reason,” Pieter Nota, Member of the Board of Management (customer, brands, sales) at BMW AG, told ET. “So, if you compare, for example, with China that 10-15 years ago also had a fairly low luxury segment, I see a lot of opportunity here.”
India is home to the third highest number of dollar billionaires – next only to the US and China.
To be sure, sales of luxury vehicles in the local market expanded a robust 55% to 17,000 units in the first half of the year, as well-heeled consumers continued to make purchases despite inflationary pressures and long waiting periods. Penetration of luxury vehicles at less than 2% of overall car sales though is among the lowest when compared with all major economies in the world.
BMW India reported record sales of 5,570 cars (including 379 units of MINI) in the country in the first half of the year. The company has planned launching a total of 19 models in the four-wheeler segment this year to sustain the momentum going ahead.
Demand for electric vehicles, too, has been better than expected, and the company expects 10% of its demand in the country to come from such models by the end of the next calendar year. BMW India has sold out the allocated batches of SUV iX and the all-electric MINI.
“BMW will be prepared from the product side, from the supply side. In India, BMW iX and i4 are already there,” Nota said.
Globally, BMW is set to introduce 25 electric vehicles by 2023. Nearly half of them–the full electric ones–can be launched in India, provided the current incentives continue and adequate charging infrastructure is set up across the country. India currently levies a reduced GST rate of 5% on EVs.
“Globally, BMW is looking at different sources for lithium and other raw materials for fully electric vehicles and that has our full focus,” he said. “Self-sufficiency in raw materials for EVs is also one of the preconditions for a fast ramp-up.
BMW Group India sold 8,876 passenger vehicles (BMW and MINI) in 2021. Sales of luxury vehicles grew 40% to around 25,000 units in the same period.India had seen peak sales of about 40,000 luxury vehicles in 2018.
Meanwhile, in the premium two-wheeler space, India has emerged as the fastest growing market in the world for BMW Motorrad and is likely to feature among the top five countries in terms of volumes.
In 2021, India accounted for about 10% of all two-wheelers produced by BMW Motorrad, globally.
BMW Motorrad India more-than-doubled sales to 5,191 units last year to inch into the top 10 markets for the company.
(This correspondent was in Munich on an invitation from BMW AG)
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