Expansion Tactics for Automotive Companies

In a conversation with Asia Business Outlook Magazine, Vikram Pawah, President of BMW Group India, shared his views and thoughts on how digital technologies and partnerships influence the automotive industry's expansion tactics. He is a seasoned Corporate Executive with over 20 years of expertise in SBU management, corporate strategy, and business expansion. His extensive experience drives growth and innovation in diverse industries.

In what ways does cultural and regulatory diversity across different regions impact the expansion plans of automotive companies, and how can these complexities be navigated?

Luxury automotive is the most dynamic segment globally and here in India too. For an automotive manufacturer to remain at the top level requires an excellent combination of products, services and experiences and the ability to look beyond the ordinary.

Cultural and regulatory diversity across regions presents unique opportunities. Embracing these diversities allows tailoring of offerings to meet specific customer needs and regulatory requirements effectively. By understanding and respecting local cultures and regulations, products are created that resonate deeply with customers, enhancing customer delight.

All our customers are very different, and we remain absolutely committed to meeting all their needs. We have created a diverse range of sedans, sports activity vehicles, coupes, convertibles and limousines to choose from. We also believe its very important to give customers the ‘Power of Choice’, whether its petrol, diesel or electric powertrain.This approach also extends to designing financial products. That is why BMW India Financial Services creates highly flexible and customized solutions that fit individual expectations perfectly.

Navigating these complexities can be achieved through strong insights into the consumer mind, market dynamics and building a strategy with long-term vision. At the same time, one has to be agile enough to answer unexpected challenges.

Collaborations with other industries seem to be increasingly common in the automotive sector. Could you discuss the role of partnerships in expansion strategies, and how they contribute to long-term growth?

Partnerships are vital for growth strategies. Collaborations with technology firms, energy providers, and local manufacturers can accelerate growth and innovation.

Since 2007, BMW Group has strengthened its commitment to the Indian market and has continuously increased the number of its locally produced car models. With a strong portfolio of locally produced cars, we partnered with major Indian auto component suppliers. With the addition of these partnerships, the level of localisation at BMW Plant Chennai increased to up to 50 percent. This set even higher benchmarks not only in quality standards but also in cost optimization and value addition.

BMW Motorrad entered into a long-term cooperation agreement with TVS Motor Company to produce sub-500cc motorcycles. The resulting G 310 range of motorcycles is a success as it’s a true BMW at competitive costs in this segment. It is fascinating what BMW Motorrad and TVS Motor Company have accomplished together over the past years. Today, both parties benefit from each other’s expertise.

Recently, BMW Group and Tata Technologies announced an agreement to form a joint venture with the aim of establishing a software and IT development hub in India. The JV will leverage Tata Technologies’ digital engineering expertise and talent pool in India to contribute to the BMW Group’s strategic expansion of software coding capabilities across global IT hubs and 24/7 operations. This collaboration will accelerate our progress in the field of the software-defined vehicle.

The automotive industry is undergoing a significant digital transformation. How do digital technologies influence expansion tactics?

A successful customer experience journey starts with keeping the customer in the center. The idea is to not be tied to any one journey – online, offline or hybrid - these should simply be deployed based on the customer and developing trends.

Digital technologies are here to stay and evolve. In the last couple of years, millennials and GenZ have opened a connected view of automotive sales and services which is a significant shift from traditional methods. At the same time, the older customers have also seamlessly adapted to new technologies. In fact, we see an equal mix of customers from each age group.

"The change in consumption and purchase behavior has encouraged businesses to innovate and redesign their experiences to cater to the demands and preferences of a multi-device, multi-platform tech-savvy target audience. Their device ecosystem is one of the best ways to reach where they are. Offering digital sales and services via easy-to-use platforms remains one of the best entry points."