Peter Kronschanabi, President, BMW India Private Limited, is a happy man these days. The company has sold more cars than it had anticipated and the year is not over yet.

In a chat with Shahwar Hussain, Peter talks about the company’s future prospects and feels that the graph of premium segment will only go up in future.

Excerpts:

Congratulations, BMW has had a great year. What do you have to say to it?

Yes. We are delighted. We had planned to sell 1000 cars for the first year – March 07 to March 08. As of today, we have managed to sell 1100 cars and there is still 4 months to go in the year.

May be we will end up selling 1250 cars which is just great. This speaks volumes about the high quality of BMW cars and their acceptance in India.

Can you give us a breakup of the 1100 BMW cars sold?

Yes. 500 of these cars were the 3-series, 400 were 5-series and the rest of the numbers reside with the SUV X5 and the sedan 7-series. As of now, the 3-series is the highest selling model but we expect 5-series’ sales to overtake the 3-series’ by next year.

Even though you have not launched it yet, there are many X5s running on Indian roads. Have they been bought through BMW or privately imported?

The X5s here have been imported through BMW India. We do not book the X5 but take a down payment. There is a glitch in the booking procedure as people can cancel the booking made.  Say, 5000 bookings do not necessarily mean 5000 cars sold. It can mean 500 cars sold and the rest of the bookings cancelled. Down payment ensures a sale and the customer has very little scope of backing out at the eleventh hour.

What is the localisation proportion of the 3-series and 5-series cars that are manufactured in India?

At present there is 10 per cent localisation for these cars. Local content will obviously go up as we grow.

Mercedes has been around for sometime now and now Volvo, Audi, Porsche and Lexus (rumoured) have also arrived. Do you think the premium segment is going to be too crowded?

The market for premium cars will evolve because it has a great potential. Till now, this segment suffered from an artificial low. There was only Mercedes in this segment and someone who didn’t want to buy a Merc did not have any other options.

Now there are options and this is the prime reason why we sold 1100 cars in the first year of BMW India operations. If the premium segment had no potential, all these manufacturers would not have been here. This is healthy competition and it is very good for BMW.

We have an advantage over Volvo and Audi. Unless you have a manufacturing unit here, you cannot sell volumes and CBUs do not make volumes.

What is your production limit and are you looking at increasing it?

We have a production limit of 1700 car annually on a single shift basis. We have no plans to increase the production limit in the near future because the market does not demand it.

You will be launching the M3 at the Auto Expo in January. How many M3s do you expect to sell in a year?

The M3 is a premium car and we plan to sell around 50 cars a year and I think it is a decent expectation.

BMW M3 is a totally new car. It has a number of new features like a new chassis, new engine, and reduced weight as compared to the existing 6-cylinder M3.

Even though the M3 has a V8 engine that produces 420 bhp it is not an out and out race car. It has got perfect road manners and you can drive it to your office as easily as you can blast it on the race track. The M3 in India will cost Rs 74 lakh.

Does BMW have any plans to bring in the 1-series and motorcycles?

No, it is not feasible to bring 1-series in India. It is a small car and if we bring it as a CBU it will cost around Rs 26 lakh. That’s too high and at that price I don’t think we can sell even a single car.

As for motorcycles, we have absolutely no plans to enter the two wheeler segment.