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On 22nd July 2012, Times of India featured BMW Ultimat3 Coming soon advertisement (Shown in the  left) in its first page. I smiled at the sight of the advertisement. Luxury car market competition in India revs up!

Last month June’s sales figures of BMW and Audi showed that there is a shift happening in the market share. The key reason to that was the success of the product line-up of Audi. Though launch is in line with BMW group‘s global strategy, which clearly stated that “the new BMW 3 Series will be playing a major role in 2012“, the launch of BMW 3 sixth generation series in India will aid BMW compete with Audi in product line up. The launch comes at an ideal time for BMW. According to me, the launch will reposition them as the market leader in India in the short while.

BMW’s 3 series is the best selling model of BMW which comes in five different body styles and carries a rich legacy dating from 1975. “Best seller” tag comes from the fact that the sales last year was 3,84,464 units even at the decline phase of the Product Life Cycle and 27.9% of the overall BMW sales volume in 2011 was contributed by 3 series. The BMW 3 series caters to customers who seek economy and prestige together. In India, the BMW 3 series fifth generation cars were produced (assembled) in the Chennai plant and the same is expected to continue for sixth generation cars too. The below picture shows the five first generation cars in the teaser advertisement.

BMW 3 series

BMW 3 series

The new product launch was promoted through the website Ultimat3, BMW India’s facebook page, national dailies and other media which I am unaware of. As a high involvement product which will need to satisfy the thinking appetite of the customer, the product in the introduction phase theoretically has to advertise using learn-feel-do communication objectives based on the Foote, Cone and Belding (FCB) Matrix. The company has followed the same. It shall be observed through the emphasis on the new features of the car with detailed descriptions, the legacy associated with the 3 series cars and the technological capabilities in the advertising promotions. The product was launched yesterday (27.07.2012) with Sachin Tendulkar unveiling the car. Celebrity associations are very much required for the luxury brands.

BMW Group India president Andreas Schaaf and Sachin Tendulkar

BMW Group India president Andreas Schaaf and Sachin Tendulkar

Coming to the new features , BMW’s 3 series sixth generation cars contain Head-Up display (projects important dashboard information onto the windshield reducing the need for lack of concentration), iDrive (free standing information display panel), Auto start-stop technology (Single button on-off for fuel consumption saving during traffic) and 8 Speed Automatic Transmission (smooth gear shifts), 245 HP 14.79 KMPL 4-cylinder engine (revs up 0-100 kmph in just 6.1 seconds with a torque of 350 Nm). All these features come at an attractive price ranging from 28.9 lakhs.

With the pressure from Audi A4, BMW had to come up with the best product line-up to compete head on. What more than the best-selling product of BMW group will serve the purpose? According to me, with the launch of sixth generation 3-series cars, BMW will retain its market leadership at least till this year end.

P.S. Dedicated to late Karthickeyan anna (brother), my senior (B.E. (Mechanical), Class of 2006) in NSS Unit 6 of CEG.

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The most interesting happening in the Indian Luxury Car market is the competition for a bigger share in the pie by Audi and BMW. Audi overtook Mercedes-Benz as the second big player in India this March. It had set a target to become the market leader in India by 2013. Now, it seems they have already achieved that feet. Although the Indian Luxury Car market has been declining, Audi sales has been growing at a rate much higher than its competitors’ (BMW, Mercedes-Benz and Jaguar) sales. The market share seems to be skewing towards Audi.

Indian Luxury Car Market Share

Indian Luxury Car Market Share

Once capturing no.2 position in March, Audi India head, Mr. Michael Perschke, set his eyes on market leadership. The pleasant surprise that came for him now is the timing in which it is attained. The sales figures of June 2012 from the SIAM (Society of Indian Automobile Manufacturers) reports detailed that BMW sold 750 cars and Audi sold 759 cars. (Figures as the Audi website shows is 718 instead of 759) Although there is a confusion between wholesale and retail sales figures, clearly on the y-o-y sales growth Audi is performing better than its competitors BMW and Mercedes-Benz.

The first and foremost reason for this is the success of the its sales of the models A6 and Q3. BMW has 16 models and Audi has 10 models. But the attractiveness of Audi’s models drives their success. The dealership network strength of BMW and Audi is almost the same with 22 and 19 dealers respectively. Audi eating the market share of BMW and Mercedes-Benz can’t be attributed to the innovative models and it must have other reasons too.

Recently, as a part of BMW’s global reorganization, it was planned that Mr. Andreas Schaaf be succeeded by Mr. Philipp von Sahr as BMW India President. Although, BMW’s PR reports claimed that this had nothing to do with Audi’s growth and competitiveness, it would have been factored in the decision-making. Also, BMW claimed that the comparison of wholesale and retail sales is incorrect and claimed that it was impossible for Audi to sell 759 cars. This seems to be a deliberate measure to prevent Audi’s brand  image growing in the minds of the Indian consumer as market leader. Such initiatives actually rings a bell that the market is indeed skewing towards Audi.

This competition will lead to better products, increased dealership, increased employment and of course increased spending in India. More than these, the companies might start looking to build production capacities. Already, BMW has a production plant in Chennai and the plant has manufactured more than 25000 cars so far. Audi has an assembly plant alone. If Audi comes up with a production facility, it will help in producing more jobs.

In my opinion, Audi has an upper hand in the short span due to the strong positioning of their A6 and Q3 models. For Audi to retain the leadership position, Audi has to remain innovative and competitive.

P.S. : Posted 60 articles! Reached 8k hits!! Thanks fellas!!! 🙂

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