Thursday, March 28, 2013

Andreas Schaaf, President & MD,BMW India

Andreas Schaaf, The Man in Charge of BMW India, Discusses his Company’s Product Portfolio Expansion, Distribution Network and sales Target Strategies with B&E’s Pawan Chabra. Question is: Will Schaaf’s India Plans Work?

The past 10 months have been a smooth drive for BMW India – an 81.41% y-o-y increase in sales in the luxury car market, with a 95.73% increase in production volumes. It has not been all marked with subtlety though. [During the period, BMW outsold the erstwhile #1 Mercedes Benz India by 213 units.] And given the strong December 2010 launch of the X1 (in terms of market response), the March 2011 unveiling of the 6-Series convertible and the fact that BMW is now planning to launch one of its best-selling SUVs by mid-2011 – the X3 – in India, much more is expected from the German. But competitors, who have failed to capitalise on their first mover advantage, will try and force a stalemate situation. Will BMW yield to peer fights? Not if it gets its sales & manufacturing plans in place. And this is what Andreas Schaaf – the man in charge of BMW India – hopes to get lucky with.

B&E: Late last year, BMW India announced the launch of its in-house financial services arm, BMW Financial Services, that was meant to enable it to launch tailor-made financial offerings. Not much has been spoken about it. Any numerical proof to support the advantage of this initiative?
Andreas Schaaf (AS): The performance of the financial arm has been overwhelming. In the first two months of this calendar year alone, our Financial Services arm accounted for 50% of the total sales for BMW India. You are right – the presence of our in-house financial services arm gives us independence to launch tailor-made services, which is not possible with an external partner. Moreover, it helps in accelerating the entire sales process.

B&E: In the past 10 months alone, you sold 6000-plus units. Better still, the luxury car market in India also grew at a double-digit rate, which is expected to continue for many years. What would be your projected annual sales figure, say nine years later, in 2020?
AS: The Indian luxury car market has grown at a strong double digit growth in recent years. The sales figure stood at about 15,000 at the end of 2010. We believe the segment will touch unit sales of over 1.5 lakh units by the end-2020. And considering that we would not like to lose our #1 position and market share that moves in the range of 35-40%, we plan to be selling close to 60,000 units by the end of 2020.

B&E: “Bullish estimate” we must say. Would it not prove a case of counting the crops before the monsoons?
AS: The industry is expected to grow by 30% in 2011. We sold 6,426 units in 2010 and are confident of keeping in pace with the industry growth rate. Product and sales strategy will be key for us. We recently launched the 6-Series convertible and plan to launch the X3 by mid-2011. So, if our product launch plans go well, we should be able to outperform all estimates.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

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