Interview: Ahead of German rivals in EVs, China no worry, says BMW boss

Coming on the back of a record 2023 in terms of global sales, BMW has seen its fortunes shine bright in recent times. The BMW brand registered a growth of 7.3 per cent by delivering 2,253,835 units the world over in all of last year. And closer home, BMW Group India saw record sales in a calendar year with 13,303 units sold in 2023. And if the 7,098 cars sold in first six months are anything to go by, the company is appearing all set to bettering its own record in the country. While challenges remain, both in the Indian market as well as the global market as a whole, company officials are confident of beating back against any possible blues.

BMW India has once again begun a product offensive in the country and on the sidelines of the recently-launched BMW 5 Series LWB (Long Wheelbase), Jean-Philippe Parain - expressed his confidence in the company's product portfolio. During the course of an interaction with HT Auto, the BMW Group Senior Vice President for Asia-Pacific, Eastern Europe, Middle-East and Africa, explained why BMW is in a position of strength despite existing and emerging challenges. He touched upon a range of issues, from the growth of Indian luxury car market and the evolving profile of the Indian luxury automobile buyer to BMW's electric vehicle portfolio vis-a-vis Chinese brands as well as Europe's recent decision to impose tariff on Chinese EVs.

Here are excerpts from HT Auto's interaction with Parain:

Watch: Not worried about challenge from Chinese EVs, says BMW boss

HT Auto: Congratulations on launching the BMW 5 Series LWB. But why did the Long Wheelbase version take this long to arrive in India, especially because you already had the 3 Series Gran Limousine and 7 Series LWB?

Parain: The 5 Series is an extremely important model in our portfolio. We believe it's a better value proposition for the Indian market. The development had not been made but now that it has, India is the first market where we offer this car in the right-hand drive version.

HT Auto: Recent times have seen more and more Indian buyers prefer SUV body type even if the share is near half and half between SUVs and sedans in the luxury space. Why do you think is influencing growth of SUV as a car shape?

Parain: Well I guess it's about this commanding position, a bit higher, giving a feeling of safety that is key. Also the versatility, the functionality of the car that offers many possibilities being used in different occasions, not only a business context. And of course in India, with the road infrastructure, sometimes it's quite helpful to have a bigger ground clearance.

HT Auto: BMW has come on the back of a record 2023. The first six months of 2024 have been fantastic as well. This is despite several headwinds for automotive sales the world over, and especially for electric vehicles. What is positioning BMW in a strong way against these challenges?

Parain: I think it's always important (that) when times are challenging, to have a very strong product offer and I think we have really, at the moment, the best product range in the industry. From the X1 to the 7 Series, we have only winners. That's the best medicine to be immune against any market downturn.

The BMW 7 Series is the flagship sedan model from the German luxury car manufacturer.

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The BMW 7 Series is the flagship sedan model from the German luxury car manufacturer.

HT Auto: The rise in demand for EVs are slowing down. BMW has had a 24.6% year-on-year growth in EVs but there surely is a degree of concern, isn't there?

Parain: Our overall worldwide sales grew 2.5%, our BEV (Battery Electric Vehicle) sales grew 34 per cent, so the BEV market remains much more dynamic than the overall sales. What is our success recipe? I think these are great products once again. We have the right products and a flexible architecture. We don't offer any difference to the customer between a BEV or a non-BEV and that's not the case with all our competitors.

HT Auto: So diverse EV product portfolio helping?

Parain: Not just diverse but best portfolio. I think we have an excellent product portfolio and that's why we do worldwide more than our two main German competitors put together.

HT Auto: Ahead of German competitors but what about the Chinese? Many of the Chinese brands now have extremely strong offerings. Is that a source of concern?

Parain: I think competition is healthy and in the past we have seen a wave of new competitors coming out of Japan, then it came out of Korea, now it's coming from China. I think it's a normal process. Have we lost market share in the last two years, including this year so far? No, we are gaining market share, we are extending our lead in the premium segment against all brands. In the BEV arena, we are growing faster than some very famous and prominent Chinese competitors or American competitors. So I think it's all about really being the best in the market, providing the best products at the right price.

HT Auto: China is the world's largest vehicle market, followed by the US. India is third. But when it comes to the luxury space, the Indian market is still comparatively tiny. What is your take on this?

Parain: China is very important. We have sold last year 2.2 million BMWs and China was 800,000. So it's a huge share of our sales. Has it cooled down a bit? Yes. But it still remains the biggest market, single market for BMW. The premium segment is 8 per cent of the total market in China, it's only 1 per cent in India. So I believe that for us, the growth path will be to increase the share in the total market in the number of cars that are registered, the share of the premium cars that will be registered. And I believe this will happen step by step with generation after generation, with people feeling more the lust to invest into a luxury car and showing their success.

HT Auto: Do you see India's taxation system on luxury vehicles an issue?

Parain: Of course, the more taxes there are, the more expensive the cars are. So I mean, the less barriers there are, the quicker will be the adoption.

HT Auto: And what is your view on the recent tariff imposed by the European Union on Chinese EVs?

We are against tariffs because we believe it's a lose-lose combination. If we put tariffs, they will put tariffs. And to be honest, if you look at the share of the German competitors, the share they have of the Chinese market, it's roughly 20 per cent. What do Chinese competitors in the European market have, three per cent.

HT Auto: But I am sure there is a fear that that three per cent can increase.

Parain: It can grow, but today only the Germans have 20 per cent of the Chinese market. So today, the import duties are stronger when a car goes to China than when a car comes to Europe. Maybe we can level that up, but we don't need to put additional tariffs.

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