BMW X1 AND MARUTI SUZUKI KIZASHI
A REPORT BY – GAURAV PRAKASH JOSHI
MSc BUSINESS DEVELOPMENT SEPTEMBER 2012
This report explores two product launches in Indian automobile market in the year 2011. The India launches of the BMW X1 and Maruti Suzuki Kizashi are the perfect examples of contrasting product launches of the previous year. The research for the report is based on the current and previous year findings about the performance of these products in the Indian market. The major findings indicate that BMW X1 launch was characterized by excellent vision and the right marketing mix. However, the Maruti Suzuki Kizashi launch lacked the commitment from the company to excel in the luxury sedan segment in India. BMW X1 has emerged a true pioneer and created a new growing automobile segment in the Indian market. Whereas, Kizashi is a product that shows promise but Maruti Suzuki needs to rethink its strategy for the premium sedan and SUV segments where it is struggling to make an impact.
THE BMW X1 SUCCESS STORY
Bayerische Motoren Werke AG, popularly known as BMW was established in the year 1917 in Munich, Bavaria in Germany. The company started its business by manufacturing aircraft engines for the German army. The first car under BMW marque was created in 1928. ‘Sheer Driving Pleasure’- this is how BMW has been conquering the hearts of the automobile enthusiasts worldwide, as the BMW cars have lived up to the company motto since its inception. It doesn’t end here; the BMW group boasts other world class brands such as MINI and Rolls Royce. The presence of the group and its portfolio of brands have earned it the ninth place in Forbes list of World’s Most Powerful Brands (Forbes, April 2012). Apart from excellent engineering and clever marketing, what makes BMW special is their ability to adapt to the needs of the markets and the trends. The BMW group employs over a 100,000 people and its global revenue in FY2011 was an impressive $95.83 billion (Forbes, 2012). BMW India
Much of BMW’s success in recent years can be attributed to their clever strategies in emerging markets. In the first quarter of 2011 BMW’s operating margin grew by a staggering 11.9% (Financial Times, May 2011). “BMW is absolutely at the vanguard of a ‘new era’ for German profitability” says Max Warburton an analyst at Bernstein Research. Where are these profits coming from? The emerging markets like India, China and Turkey have contributed a lot to the impressive sales figures. Sales in Asia rose by 53% to more than 90000 cars, a third more than what BMW sold in Germany (Financial Times, May 2011). In the 1990s and early 21st century, the luxury automobile segment was ruled by Daimler AG owned Mercedes Benz. It was in the year 2006; BMW invaded the luxury car market ruled by Mercedes Benz. In merely three years, BMW became the top seller of luxury cars in 2009. BMW India Private Limited is headquartered at Gurgaon, New Delhi. The manufacturing and assembly plant is located in Chennai, Tamil Nadu and is equipped to produce 11,000 cars a year in double shifts. Dr Andreas Schaaf, President BMW India mentioned during an interview with The Business Line newspaper that considering the current demand from the Indian market BMW has plans to set up a second assembly facility. BMW India sold a total of 9371 cars in 2011. Most of these sales have come from one successful model – The BMW X1. (Financial Times, May 2011) BMW X1
The BMW X1 was launched in India in January 2011. The launch of the X1 created a whole new automobile segment in the Indian market. The model was launched as a ‘Compact Crossover SUV’. The car was launched in petrol and diesel variants and was available in the price range INR 22 lakh to INR 30 lakh (USD 48400 to USD 66000). The X1 came with 2000cc petrol or a diesel engine with...