No plans to phase out diesel vehicles: BMW India president Vikram Pawah
BMW India does not intend to phase out diesel-run vehicles as it would rather leave the choice to the customer regarding whether they want to purchase them or not, its India president Vikram Pawah said on Friday.
He said the company’s car sales in India rose by 10 per cent year-on-year (Y-o-Y) in the January-September period, reaching 9,580 units, amid better production due to an improvement in component supply.
BMW’s motorcycle sales in India also increased by 26 per cent Y-o-Y, totaling 6,778 units during the same time period.
On September 12, Road Transport and Highways Minister Nitin Gadkari, said the automobile industry must reduce the production of high carbon-emitting diesel vehicles, or else the government may consider imposing an additional 10 per cent goods and services tax (GST).
As major auto stocks tumbled, he clarified that no such proposal was under the government’s consideration.
Mahindra & Mahindra, Hyundai, Tata Motors, Toyota Kirloskar and Kia are the major players in the diesel car market. The share of petrol-run cars, diesel-run cars and electric cars in BMW’s domestic total sales is 55 per cent, 35 per cent and 10 per cent, Pawah told Business Standard in an interview.
Does the company have any plans to discontinue its diesel vehicles? Pawah replied, “We don’t intend to. We believe in the customer’s individual requirements. If the customers phase it out, and if they don’t want it anymore, we will not produce it. But on our own, we don’t intend to phase them out.”
He explained that BMW does not believe it should choose what customers should purchase. “So we offer all our products — whether they are petrol-run, diesel-run, or electric — to our customers…If the demand (for diesel-run vehicles) moves, we will adjust our production,” Pawah added.
He said that the company will see a “solid double-digit growth” in 2023. “You can already see that we are growing at a very fast pace so we will absolutely have a record year (2023),” he explained.
He said that the luxury car sales do rise during the festival season (which begins from Durga Puja and Navratri) but the jump is not as high as observed in the mass car market during the same period.
“The sale of luxury cars is a little bit more consistent throughout the year,” he added.
He said that the shortage of semiconductors as well as components is much more “under control” now compared to a few months back. “Their supply has improved considerably,” Pawah noted.
He clarified that the challenges related to logistics continue to affect the company. Logistics is becoming more “unpredictable” because of certain ports getting clogged or shut suddenly. “This means there are certain delays in the supply but it does not impact the overall production plan,” he noted.
The company currently has an orderbook of about 2,000 cars and 1,000 motorcycles. It sells 24 car models and 24 motorcycle models in India. Electric vehicles (EVs) were just 3 per cent of the company’s total car sales in 2022.
“We said the share of EVs in total sales will be 10 per cent in 2023. We are there now. I see it going to 15 per cent next year, and then going to 25 per cent in 2025,” he added.