BMW bets on EVs, says impact of EU-India FTA to be limited

NEW DELHI: BMW Group India expects limited impact from India-EU Free Trade Agreement, as most of its models are built in India, BMW Group India CEO Hardeep Brar told TOI."There is going to be a marginal impact on overall pricing of business because of FTA. It may help at top-end of luxury cars where we may be able to import more cars but there will be not much impact on the normal business, " Brar said.Brar said nearly 95% of BMW cars sold in India are assembled locally, attracting duties of 15-35%, while only about 5% are imported as completely built units, translating to less than 1,000 units out of around 18,000 cars sold annually. "Even if this 5% rises to 7-10%, it is not a significant jump," he said.On the West Asia conflict, Brar said BMW had not faced supply disruptions yet, but was closely monitoring currency volatility, adding that rupee depreciated by around 5-7% this year, from about Rs 103 to nearly Rs 108 per euro, due to which the company took price increases in Jan and April. Brar also said BMW Group became the top luxury carmaker after electric vehicles (EV) penetration increased due to rise in crude prices during West Asia conflict. "The current geopolitical situation created noise around rising crude and fuel prices in India post-elections. This pushed the narrative towards electric vehicles, where we were already performing well," Brar said, adding that the combination of product launches and expansion to new cities also helped. He said proper supply planning helped BMW quickly respond to rising EV demand to capture the market. "Our lead time is almost six months and we maintain kits for production, which allows us to quickly tap sudden increase in demand for electric vehicles." The company's EV sales grew 83% Y-o-Y, capturing the largest market share of more than 70% in the luxury electric segment in India. Brar added that going forward, EVs are expected to account for 30% of BMW's India portfolio by 2030.