BMW has been leading the luxury car market straight for three years, but 2012 is turning out to be a different story. German rival Audi has made strong gains and led the segment over the last few months both on high discounts, network expansion and the strong success of its new entry model ? the Q3 compact SUV.
So what is BMW doing to keep the lead with just December to go before the 2012 count is taken? Before an entirely new model of the X1 compact SUV is launched in January, it is pushing numbers with the outgoing X1 model by offering attractive financing options. Buyers opting for the financing scheme get a R5-lakh discount on the X1 base model (R26.40 lakh), according to a Delhi-based dealer. The X1 is the cheapest model in BMW India?s range (till the 1 Series is launched next year) and the only one where a corporate edition (no frills, cheaper variant) is available. That makes it the perfect volume product.
?That is the advantage of having an in-house financing arm, that we can offer fantastic deals. There are no direct cash discounts being offered by the company, though dealers are free to offer their own. There very competitive interest rates being offered on the X1, just like the ones on the old 3-Series, before the new model was launched earlier this year,? a BMW India spokesperson told FE.
BMW expects volume growth in 2012 to be largely flat ? between January and October this year, it has sold 7,389 units. In 2011, BMW had a wide lead over rivals ? it had sold 9,371 units compared to Audi?s 5,511 units and Mercedes-Benz?s 7,350 units.
The company, which has announced a price hike of up to 10% from January, said that the focus will now be to increase profitability rather than participate in price wars and push discounts. A sales growth is expected in 2013 with new models and a growth in sales outlets (50 by 2014, from the current 29).
BMW India president Philipp von Sahr said, ?Of course we want to be the number one in sales, but not at any price. Monthly sales is just one parameter (of success). If these discounts continue, it will definitely makes the business unprofitable in India.?
On Thursday, BMW launched the new X6 crossover, or ?sport activity coupe? at its new largest-ever India dealership at Faridabad. Imported as fully-built units, the X6 is priced at president78.90 lakh for the diesel and president93.40 lakh for the petrol variant.
After the new X1 launch next year, BMW will also launch the new 7 Series flagship sedan, followed by a new entry model ?the 1 Series hatchback. All three will be assembled locally at its Chennai plant which currently has an annual capacity of 11,000 units, which may go up to around 15,000 units.
