Desperate times call for desperate measures. German luxury carmaker BMW had a torrid 2009. Despite clocking growth in key markets like China and India, global sales still plummeted 10 per cent to 1.29 million vehicles. With sales and profits nosediving, BMW AG Chairman Norbert Reithofer had to pull a rabbit out of the hat that was not called "China".
And he did. By disclosing that BMW will start making a new frontwheel drive small car from 2014. To put this in perspective, the smallest car BMW makes today, under its own brand, is the 4.3 metre-long 1-series comparable to the Honda City on Indian roads. The new car will be smaller, a size comparable to what is currently sold as large hatchbacks in India.
The company is now launching both full and partial hybrid technology across several cars in its range. The plans for the small car, then, integrate with the company's larger game plan. The new small car, dubbed the "Megacity Car" by BMW, is just that—a car designed for the needs of the world's megacities. And this is where India fits in.
There is a realisation that on the crowded roads of some large Indian cities, a small, efficient BMW would work a lot better than a gargantuan luxury sedan. Efficient engines coupled with hybrid technologies— even though BMW does not plan to launch such vehicles in India immediately— might also persuade buyers to go green.
Meanwhile, BMW became India's largest luxury car brand in 2009 and plans to hold on to the top spot in 2010. The outgoing BMW India President, Peter Kronschnabl, has set his team a target of 4,000 cars (it sold 3,000 in 2009) this year. With the Indian economy back on its feet, the target may not be a stretch.