BMW India boss, Philipp Von Sahr, refuses to join the ongoing price war citing the company's premium status
Newly appointed president of BMW India, Philipp Voh Sahr says he will not resort to price war to keep its lead in the luxury car race in the country.
"We want to be number one and continue to be number one with sustainable growth and not through discounting," says Sahr, adding that sometimes its competition forgets that "we are premium players".
Sahr, 54, who replaced Andreas Schaaf at the helm of the German luxury carmaker's India operations on October 1, has taken the wheel at a time when rival Audi is rapidly reducing its gap with the market leader after having already raced past Mercedes. In a sluggish market of 2012, while BMW has managed to match its last year's sales numbers, Audi has increased its sales by more than 40% in the same period.
The new BMW India chief believes one reason for this is that its competition is driving price war to unsustainable levels.
"There are price wars and rivalry between competitors in other mature markets but its much more intense here. In India price war is in line with volume products and often competition forgets that 'we are premium players'," he says.
Sahr's craze for cars began at the age of 14 when he and his brother would go every weekend on their moped to the Nurburgring racing circuit 20 kms away from their home to watch the races.
"My first hero was Hans Jaochim Stuck, the ex-Formula One driver, driving the BMW 2002 TI (at 19 he won the first 24 hours race)," he says.
A 27-year veteran at BMW, Sahr started commercial apprenticeship in industrial sales with the luxury carmaker in Munich in 1979. Since then he has adorned various roles. Before coming to India he was president of BMW group Belgium.
Sahr is not completely new to India. He visited the country as a tourist. And BMW AG board member, sales & marketing, Ian Robertson, had told him that apart from seeing the Taj Mahal, he should also keep an eye on the India market. That was 2011.
Not only will BMW stay away from price war frenzy but, according to senior management, the luxury car maker plans to increase prices by as much as 10 per cent in some of its product early next year to maintain its premium appeal.
While Audi may be breathing down its neck, Sahr believes BMW's biggest competitor in the long run is Mercedes, which like BMW has independent production and development facilities worldwide.
BMW expects new models to drive its growth in India. It also plans more assembled products in the country to counter high import duties.
The company will drive in the new X1 in January, followed by the next generation 7 series and the 1 series at the other extreme to build volumes by end 2013. It will have 6 products assembled in India-1 series, 3 series, 5 series, 7 series, X1 and X3 SUV.
So far BMW has invested 180 crore in the Indian market and increased capacity from 1,600 units to 11,000 units.