BMW plans to take on Asian rivals

BMW, the German luxury carmaker, plans to take on its Asian rivals - Toyota, Honda, Hyundai - with the core strategy of making customised cars from its flexible production lines to stay ahead in its century-old luxury marquee business.

Norbert Reithofer, CEO and chairman, BMW board, said, "We stand out of our Asian competitors such as Toyota's Lexus model, which is a good and successful car, but has its own limitations. We have global design approach and make customer specific cars in all our factories, which our Asian competitors lack."

Already taking a lead with 90 per cent of its 1.3 million car sales coming from customised cars, BMW is privy to the emergence of Asian players in the ultra-luxury cars business. While its global sales grew at mere 5.1 per cent, BMW has been able to capitalise higher sales turnover in the Asian market.

In the fast-growing Chinese market, it posted 30 per cent growth in sales at 42,000 units and Japan, its largest market in Asia, it grew at 5.5 per cent with sales of 62,115 units in 2006.

However, despite the steady increase in sales, the company takes the Asian threat seriously and hopes that its customer-specific cars would help it to maintain the lead. Last year, the company shifted 120,000 cars to its 23 different factories to meet the customer specific demands.

Michael Ganal, member, BMW board, said, "There is a serious threat from the Asian car companies, in particular the Japanese. But their products are not tailor-made for the global market. Our concepts are purely based on the global market, the US in particular, and we have to see how these (Asian) companies adapt to the changing scenario. For the time being, they are using their low-cost operations to copy us to some extent, but as the original maker we remain far ahead."

BMW's has also adopted an fuel efficiency improvement programme (under its Efficient Dynamics strategy). The company has been able to bring about 20-30 per cent improvement in its erstwhile fuel guzzling cars.

"We are globally competitive in the cost of production and our lean engine technology has tremendously improved the fuel efficiency. Our success to produce different luxury cars from common flexible production lines makes us unique and that has been accepted well in the Asian markets. This year we are targeting 33 per cent sales increase in China, and would notch at least 1500 units in India," Norbert Reithofer added.

BMW has to its credit of introducing hydrogen fired cars, and has already sold 100 such units. It is developing cutting-edge technology in the field of ethanol blended fuel and hybrid cars for the future market.