India to be among BMW's top markets by 2020: Ian Robertson

India is a priority market for BMW and the German luxury carmaker will continue to invest here even if the government sticks to its tighter import norms, a top official said. India will be among BMW's top markets by 2020, says BMW AG Board Member, Sales & Marketing, Ian Robertson.

In the 2011-12 Union Budget, Finance Minister Pranab Mukherjee has redefined the meaning of completely knocked down (CKD) units of vehicles by excluding units containing pre-assembled engine, gearbox or transmission mechanism. This means the current CKD kits of carmakers will be considered fully built units and attract 110% duty compared to 40% on CKD kits. While other German carmakers Audi, Mercedes and Volkswagen have criticized the decision, BMW has yet to comment. Robertson says the carmaker is still seeking clarifications. In an interview with ET Now at the recently-concluded annual results conference of BMW in Munich, Robertson also said BMW's growth in India will be backed by a pipeline of new launches and innovative products. Edited excerpts:

How do you find the going in India? What are your plans for the country?

We have been very pleased with the growth over the last few years. We have moved substantially from where we were in the beginning. Currently, we are assembling more than 8,000 units every year (in India). We plan to expand it to 10,000 units from March 31, 2011. We launched X1 just before the Christmas, and we will launch the X3 sports utility vehicle later this year. This will be assembled at our Chennai facility. We are very confident that we can continue to see good growth in India over the years to come. So, our dealer network and plant capacity are going to take a step forward.

Do you have plans to launch an India-specific vehicle?

We are solely a global products company. We will make regional variations just as we did in China-a long wheel base car. However, in India, we will look at such variation only if volumes justify it.

The new definition of completely knocked down, or CKD, units of vehicles proposed in the 2011-12 Union Budget will increase your costs. Audi has already said that it will relook its India strategy. What is your stand on the issue?

The new definition was released only at the end of last month. We are still waiting for it to be clarified. We would like to understand further what it means. But I think through the various bodies within India, a solution can be found where the industry as well as the country can benefit. I am confident that within the next four to five weeks, there would be greater clarity.

Some senior officials in BMW say it is not easy to scale back operations even if the CKD definition changes. Do you agree?

India is no doubt a very important market and as the market starts to develop more, then obviously it is difficult to stop new investments.

Economists have warned that galloping oil prices can crimp economic growth. Do you think sustained rise in oil prices will slow your impressive pace of growth?

The input cost and oil price hikes will be more than compensated by rising sales and new product launches. Emerging markets like China, Brazil and India are adding production and other markets like South America is looking at new production facilities to meet the rising demand. We are also creating the I range of electric cars and battery powered car to step up sales in these markets.

Do you see high potential for hybrid and I-series electric cars in India?

These technologies are being developed for all types of markets, whether it is a major urban environment or whether it may be a mass market. These vehicles will ultimately find their usage in all types of markets. Surely India will be one of the major markets for us sometime in future for such type of cars.

When do you plan to drive in 1-Series cars and the BMW Mini to India?

First of all, we need to have sufficient demand for such small yet expensive cars. Specifically the brand building for Mini will require high investments. So, we are waiting for the right time for these cars in India. At the same time, we are doing very well with our Rolls Royce cars in India which we had launched at the right time,

America's recovery is getting stronger with faster manufacturing activity an rising consumer confidence in February. Has the global automobile industry started to benefit?

Luxury car manufacturers are targeting higher sales this year because of rising consumer spends in the US, Europe and China. The global economic rebound has tilted the balance in favour of American companies who are upping hiring and adding shifts to meet the rising demand.

Any after effects of the killer earthquake and Tsunami in Japan on BMW?

BMW is closely watching the situation on how it will affect operations in Asia and China. Over the next few days, we will be in a position to evaluate the supplier chains in Japan and we are sure that we can maintain our own production.

(The authors are in Munich on an invitation from BMW to attend its annual results conference)