BMW India Pvt. Ltd. Sindhu Wadhwa BBS 1 e 50165 ACKNOWLEDGEMENT The project that I have undertaken required a lot of information gathering and guidance which has been provided by various people at various stages of the project. For this purpose I would like to thank the following people: Mr. Ameet Sao, who gave me an opportunity and freedom to work on this project and study the style of operation and work culture of BMW India Pvt. Ltd. Ms. Pooja Wadhwa, an intern in BMW India at the Chennai plant, who provided me with information about the company, let me understand the working pattern of managers at the Chennai plant. Mr. Bill Gates, Chairman, Microsoft, without whose advanced software this project would have not been possible. Mr. Page and Mr. Brin, Founders, Google corp. whose web portal allowed me to search for relevant information for my study on the chosen company. Contents 1) Company Profile 2) Reason for Entry into Indian markets 3) Strategic Objective 4) Visions 5) Mission 6) Marketing strategy 7) Dealership Network Strategy 8) Product Line Modifications 9) Market Share and Performance 10) BMW India Market Competition 11) The Five Forces Model 12) SWOT Analysis 13) Operations at BMW - The Assembling Process 14) Key Inferences about the Operations Process 15) Quality at BMW 16) The Purchasing process at BMW 17) BMW Human Resources Policy 18) Brand Building and Sustenance 19) Corporate Social Responsibility 20) Management at BMW India 21) Organization chart of BMW India 22) Key inferences from the Organization Chart 23) Basic principles followed by BMW 24) Future Expansion Plans BMW India Pvt. Ltd. Company Profile Headquartered in Chennai BMW India Private Limited is a 100% subsidiary of the BMW Initial investment in India is 1.1 billion Indian Rupees Employed around 200 people Models Assembled/Manufactured Locally BMW 3 Series (330i, 320i, 320d Corporate Edition and 320d Highline) BMW 5 Series (523i, 520d, 525d and 530d) BMW X1 (To be launched soon) Imported BMW 5 Series (535i CBU) BMW 5 Series Gran Turismo (Limited Edition) BMW 6 Series (650i Coupé and 650i Convertible) BMW 7 Series (740Li, 750Li, 760Li and 730Ld) BMW X3 (X3 xDrive25i, X3 xDrive20d) BMW X5 (X5 xDrive50i and X5 xDrive30d) BMW X6 (X6 xDrive50i and X6 xDrive30d) BMW X6 M BMW M3 (Coupé and Convertible) BMW M5 BMW M6 (Coupé and Convertible) BMW Z4 (sDrive35i Roadster). Reasons for entry into Indian Market The luxury segment is puny in India, accounting for no more than 0.03% of the market. Nevertheless, high-end carmakers see it as crucial to build a presence here due to the market's anticipated growth. In 2000, only five in every 1,000 Indians owned a car; by 2010, the number is expected to have risen to 11 per 1,000. By 2010 there could be 13 million cars on India's already crowded roads, up from just 5 million in 2000. "We want to benefit from this growth potential, but we also want to make an active contribution to this growth," said Norbert Reithofer, chairman of BMW's board of management. "Chennai has a developed infrastructure and it benefits from having parts suppliers nearby," added Frank-Peter Arndt, BMW board member in charge of production. 13 potential production locations were analyzed for setting up the production plant in India. Chennai was chosen as the most feasible option because of the following reasons: Automobile manufacturers Automotive suppliers Qualified labor Cost balance for production location Infrastructure – International Airport, Sea Port, Road Network Strategic objective “The BMW Group is the leading provider of premium products and premium services for individual mobility.” Vision “Uniqueness through diversity, Leadership, taking Risk, courteous” Mission "To become most successful premium manufacturer in the car industry" Marketing Strategy BMW India studied the Indian markets and found it to portray immense dynamism and this is how BMW formulated its marketing strategy. BMW India decided to stand their ground in a fiercely competitive environment with new ideas and the strength to promote our new products. In absolute terms, India cannot compete with other high- volume single markets yet. But, the future belongs to India. If you want to benefit from the dynamics of the Indian market later, you need to act today. This is what they did. They were prepared to meet the challenges head-on to ensure their company's success. These qualities enabled them to weather stormy conditions and continue to invest in our future. They were able to anticipate trends and that gave them an edge. Their strategy has been to embark on an aggressive product offensive with rapid market expansion through greater customer intimacy. They have addressed these through competency-enhancement across all levels seeking new business opportunities. As pioneers in bringing luxurious dealerships to India, they set a decisive course by setting up BMW dealerships of international standards across all metros. They have set very high standards in service quality and customer care in India, which meet the expectations of their customers. And this is exactly how they position themselves to redefine luxury, focusing on individuals, recognizing future challenges, promoting creativity, and being the leading supplier of luxury products and services for individual mobility. They always concentrate on their strengths and thus on the Implementation of the luxury claim which they convey with each of their vehicles. They do not make compromises. This has been their strategy in India, where they currently have 16 BMW dealer facilities. As we embark on the next phase of our dealer network strategy, BMW India will further expand operations by establishing its presence in 10 more cities. Communication, Pricing and Distribution Most of the BMW communication takes place through print media in magazines and newspapers. This is supported by communication through TV advertisements and point of sales promotion. Now days a good company has a state of the art web portal. BMW websites are highly informative, interactive and a pleasure to watch. One can get any amount of detailed information regarding the prices, features, retailers, support services, etc. There are company specified retailers and distributors throughout the country who are in constant touch with the parent and comply implicitly. Dealers also have round the clock servicing and repair. BMW also has a used car portal where one can choose and buy his/her appropriate model. Dealership Network Strategy BMW India is the pioneer in bringing luxurious dealerships to India. BMW India has set a decisive course in India by setting up BMW dealerships of international standards across all metropolitan centers of the country. BMW India has set very high standards in service quality and customer care in India. The present dealer network covers 95% of the sales potential of the premium car segment in India. BMW India‟s dealership Network Strategy comprises of two phases as mentioned below. Phase I Phase I of the Dealer Network Strategy included establishment of 12 dealers covering major metropolitan centers of the country by the end of 2009. An aggressive plan was chalked out and implemented for completion of Phase I of the dealer network, much ahead of schedule (Phase I was completed by end 2008). Owing to an exuberant growth potential, BMW India has further chalked out Phase II of its dealer development strategy to support its plans Phase II In Phase II, BMW India will further expand operations in 10 additional cities in India. Presently, BMW India is present at 17 locations in the Indian market; BMW Studio (New Delhi), Deutschen Motoren (New Delhi), Deutschen Motoren (West Delhi), Bird Automotive (Gurgaon, NCR), Navnit Motors (Mumbai), Infinity Cars (South Mumbai), Krishna Automobiles (Chandigarh), Navnit Motors (Hosur Road, Bangalore), Navnit Motors (Millers Road, Bangalore), KUN Exclusive (Hyderabad), Kun Exclusive (Chennai), Bavaria Motors (Pune), OSL Prestige (Kolkata), Parsoli Motors (Ahmedabad), Platino Classic (Kochi), Kun Exclusive (Coimbatore) and Sanghi Classic (Jaipur). BMW dealerships presently display the BMW 3 Series and BMW 5 Series that are produced at the BMW Plant Chennai. BMW dealerships also display the BMW 6 Series, BMW 7 Series, BMW X3, the BMW X5, the BMW X6, BMW Z4, and the BMW Gran Turismo which are available in the country as CBU‟s (Completely Built-Up Units). The BMW M3 Coupé, BMW M3 Convertible, BMW M5, BMW M6 Coupé, BMW M6 Convertible, BMW X6 M, BMW 6 Series Individual and BMW 7 Series Individual can also be ordered at BMW India dealerships. Product Line Modifications BMW entered the Indian car market in the year 2006 with the launch of its first BMW model. The company established a sales subsidiary in Gurgaon in 2006 to develop its dealer network. In 2007, BMW set up its first state of the art manufacturing unit in Chennai. According to the Society of Indian Automobile Manufacturers (Siam), BMW India registered growth of 12.76% at 1,016 units from April-July 2009. However they have extensive expansion plans and hope to bag a sales figure of 3,000 units in 2010. This was planned to do by modifying the product line according to the Indian markets. BMW Initially launched the 3 concept cars in India- 3 Series, 5 Series and 7 Series which were priced as follows: 3-Series – Rs. 36-38 L 5-Series – Rs. 45-50 L 7-Series – Starting Rs. 1.08 Cr. The company further studied the Indian market in depth and realized that the models launched do no suit the Indian roads as well as the Indian mentality. Therefore, the company planned to modify models as per Indian markets. The new models of BMW were altered with some features such as the I-drive function; the 7-Series was no more a customized model; standardized interiors and many such modifications.