As the Indian market for passenger vehicles continues its rapid expansion, the growing number of buyers also includes a set which is very choosy.
Some of these choices are also governed by one’s spending power. And that is what I want to talk about. We now have brands such as Porsche or Audi in the market, along with others such as the Mercedes Benz, which have been around for a decade—and most people would love to own one of these, right? Well, that’s not always possible, so people end up buying premium sedans such as the Toyota Camry or Honda Accord.
That is changing now. That’s right; you can now get a BMW at the Camry price point—give or take a lakh rupees.
BMW gets off the mark
Enter the Corporate Edition of the BMW 3 series. This car was conceived as a variant by the Bavarian giant in 2009, as being a slightly stripped-down version, for fleet buyers or companies in India. These were buyers who wanted the car strictly with the intention of handing the keys to a driver. So they didn’t want seat warmers, or a sunroof, or a fancy information and entertainment system such as the iDrive. Nope, they just wanted the brand, the leather on the rear seat and the power of a BMW. So, all fleet and corporate buyers were offered the diesel 3 series (320d Corporate Edition)—again a preferred choice—for Rs24.4 lakh. Compare that with around Rs31 lakh for the regular 320d Highline and the 320d Corporate Edition looks very attractive. Both cars carry the same 177 bhp engine and six-speed automatic transmission.
BMW 3 series: The Corporate Edition offers value for money.
Sales started to pick up, but then individual buyers got a whiff of this model. And soon, they too were banging on the door at BMW India. Peter Kronschnabl, the outgoing president of Indian operations, saw this as an opportunity. And so, a few weeks ago, the Corporate Edition was made available to individual buyers too. Sure, it doesn’t have the features I mentioned; it also doesn’t have the wood-grain finish dash or the pull-up window blinds in the rear, or even the LCD screen. But it has still been flying off the shelf, with the company now facing some back orders. Over 300 cars have been sold in around two months.
More luxury for less
That is hardly surprising—that’s how it is in mature markets such as Western Europe. So I now routinely meet folks who don’t want just a hatchback—they want a premium hatch; those who don’t want just people movers or multi-utility vehicles (MUVs)—they also want plush interiors; or those who want a certain brand—and are ready to compromise on some of the bells and whistles.
Passat: Volkswagen has relaunched the car at Rs19.2 lakh.
But the point of writing this was not for me to go on about that one car. In fact, it’s the emerging trend that’s more vital. You see, the BMW strategy has now forced Mercedes Benz to work out a similar proposition with its new “Executive” variant C-Class sedan. For now, the company insists this is just for corporate and fleet sales; however, individual sales are imminent given the overwhelming demand from buyers.
Audi India is also rushing in a basic variant of its A4 model—which should be in the market by June.
This is where the story gets even more interesting. With a BMW available for Rs24 lakh, why would anyone buy a Volkswagen Passat for the same price? So Volkswagen has relaunched the car, albeit with a 157 bhp, 1.8 TSI petrol engine and manual transmission, at Rs19.2 lakh! The Rs5 lakh climb down from its earlier diesel engine and automatic transmission version still gets you most of the creature comforts by the way, and the car looks just as stately with its chrome-enhanced face.
This move has also sparked off a rethink from Honda, Toyota and Nissan—and even Volkswagen’s sister company Skoda—on tweaking and cutting prices on their comparable models. The Skoda Superb, in fact, also has a cheaper, manual version at Rs18.28 lakh (down by around Rs1.2 lakh), with pretty much the same specs as the Passat.
Rides get cheaper, top down
The trend is likely to move down another segment too.
We already saw a flutter when Chevrolet brought in its Cruze last year, at way more attractive prices than the competition. The result was a cheaper Toyota Corolla Altis at the end of last year, and a cheaper Volkswagen Jetta just a couple of weeks ago.
I know that this will affect some of the future models that are being considered for India. Ford with its Focus, Renault with its Fluence and Tata Motors with its Prima concept, are considering a lower entry price point—in the range of Rs9-10 lakh—than they were when they began examining this segment in 2008. These cars will start hitting the road in India by 2011.
The Indian buyer has it good. The choice is immense, the luxury and performance options are aplenty, and the prices are more attractive than ever before. And it’s only going to get better. Is anyone complaining? Absolutely not!
Siddharth Vinayak Patankar is editor (auto), NDTV.
Write to Siddharth at