Inside Financial Markets

BMW keen on introducing lower-end models in Pakistan

The government’s auto policy has started to bear fruit.

In the latest development, German carmaker BMW is making efforts to increase its presence in the country through the launch of intermediate and low-end models. The company’s move to launch the second generation of BMW X1 in Pakistan is a step in that direction.

BMW Group Middle East Managing Director Johannes Seibert said the X series launch in Pakistan is to attract customers currently using other brands. “We have positioned this model pricewise, and it is very competitive,” Seibert told The Express Tribune.

The idea behind launching the model is to facilitate the access of new customers in our group, and we notice that over 90% are switching from other brands, he added.

BMW has been present in Pakistan since 2004 in partnership with Dewan Motors that has launched 2 PHEV models, the X5 40e and the 330e. These models, according to the company, have received a positive customer feedback and are accounting for around 15% of total BMW sales in Pakistan.

However, high end models continue to be imported by individual customers. The X1, priced at Rs3.99 million, has already attracted brand conscious consumers. According to the company, around 120 pre orders have been received and delivery will start in February 2017.

On an average, the company sells 150 units per annum, but Seibert said that the year 2016 has turned out to be a very successful one. “We are estimating that by the end of this year, over 30% more cars will be sold and delivered to the customers as compared to previous year.”

Dewan Motors Chairman Dewan Mohammad Yousuf, however, said that in 2017, they are expecting to sell 250 units in Pakistan, which shows the rising interest of customers in this brand. “We are very much committed when it comes to the BMW Group and investments we have made with them,” Yousuf said.

“As a lot of developments are taking place in Pakistan, especially after the China-Pakistan Economic Corridor, demand is rising. We are geared up for whatever would be necessary, in this category we are proactive and will go aggressively as per demand and will invest further to expand our operations,” Yousuf added.

The company does not consider any imported Japanese vehicle as a serious threat to its model. “I don’t consider Japanese SUVs (Honda Vezel) as a competitor with the X1 as it is a used car being sold in Pakistan,” Yousuf said.

At this point of time, the company is looking for numbers before deciding to invest in assembling BMW vehicles in Pakistan.

“It depends on demand, each company has its strategy for entering and exploring the potential which can be in the shape of an assembly line or CKD with local content,” Seibert said, adding that it is a complex business case, however, the dynamics of Pakistani market deserves a regular look into the matter. “We are open to anything and willing to discuss anything in this regard,” Seibert added.

Baqar Hussain

A Wannabe CFO, just had stepped in the corporate sector, willing to explore every aspect here and learn as mush as i can, awareness for those who dont, get the info where ever possible and stay up to date always.

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Inside Financial Markets was a joint publication of Pakistan Stock Exchange (PSX)and Society of Technical Analysts Pakistan (STAP)