Lower taxes, better roads needed to grow luxury car segment: BMW India headOctober 16, 2020
Tax policy deters buyers: BMW’s Pawah
To push demand for luxury cars in India, it is important to develop road infrastructure and to normalise the tax regime, which, in the current form dissuades people from buying luxury cars, BMW Group India President Vikram Pawah said.
“…as the road network gets developed, I’m sure you know people will like to drive even better cars… The second part is on the regulatory or the taxation policy… Currently, people are dissuaded from buying luxury cars because of the taxation regime, the way it exists…To some degree, we are depriving ourselves as India…that we are not able to experience the same technology, the same luxury, the same facilities that our counterparts in the world enjoy,” Mr. Pawah said, replying to a query.
“Taxation needs to be normalised so that people can choose the latest technologies. Currently, a level playing field is not provided… people are not allowed to choose the latest technologies they want to try. Once those things are corrected, you will see the market booming again for luxury cars,” he added.
Mr. Pawah, however, added that he expected the BMW brand to continue to grow on the back of new product launches. “We are in the midst of the biggest product offensive and we will continue to introduce products over the next 18 to 24 months that that will excite the market.”
The German luxury car maker on Thursday introduced the first-ever BMW 2 Series Gran Coupé in India which will be produced at BMW Group Plant in Chennai. The car, with a starting price of ₹39.30 lakh, will be available immediately in the diesel variant, while the petrol version will be launched later.
Asked about taking the number one spot in India’s luxury car market, Mr. Pawah said, “Being number one in a very small pond is not an achievement. For me, the achievement is to be number one in increasing the size of the market, driving the growth of the market, outperforming the segment, making sure that we are growing at a faster rate than the segment is growing, and that will make us number one automatically.”
He added that with new products lined up, the brand is confident of attracting new customers as well as attracting customers from other brands.
On the impact of COVID-19, Mr. Pawah said in the current year, every quarter had been a different story. While in Q1 the industry saw transition from BS-IV to BS-VI emission norms, the second quarter was a total washout and some month-on-month recovery was seen July onwards.
“…With the festive season around the corner, we expect that trend to continue… so we expect the sales to steadily increase over the rest of the quarter and towards the end of the year. However, having said that, I would say the entire 2020 will still be lower than 2019, obviously, because we had a complete quarter missing. But I see a steady improvement from now onwards, into 2021.”
He added that he saw the year 2020 as a “detriment”, rather than a setback mainly because of the trend worldwide that countries that are coming out of COVID-19, are seeing “really strong growth and I do expect the same to happen in India as well.”
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