BMW is considering introducing luxury buses in India to leverage its brand reputation and take advantage of the growing luxury bus market. The luxury bus market in India is expected to grow 20% annually due to increasing urbanization. BMW would initially focus on connectivity between urban areas in India but could later expand across Asia. Its buses would compete with established brands like Volvo and Mercedes Benz.

1. Introduction of
Luxury Buses in
India
Group 5
Atman, Siddharth, Milin,
Mona, Prasan

2. The Team
Mona Sharma Siddharth R Prasan Arora
Atman Shah Milin Parekh 2

3. BMW Background
BMW stands for Bavarian Motor Works is a German
automobile, motorcycle and engine manufacturing company
Founded in 1917 and headquartered in Munich, Bavaria,
Germany
Initially, BMW started off manufacturing aircraft engines and
subsequently after WWI moved onto automobiles
Accolades
In June 2012, BMW was ranked the #1 most reputable
company in the world by Forbes
The BMW Group is ranked #61 in the list of Forbes Fortune
100 Companies (2012)
Sources: http://www.forbes.com, http://www.bmw.com 3

4. BMW’s Portfolio
Source: http://www.bmw.com 4

5. Strategy & Product Positioning
STRATEGY
BMW should diversify its portfolio by opting for a line
extension
Create a new brand in the luxury bus market to take
advantage of a growing market
Leverage its iconic brand identity
ZERO Cannibilization – New Product
Strong promotion should ensure an improved brand image
5

6. Strategy & Product Positioning
POSITIONING
Market: Initially focus on India, and later expand to Asia
(China, Vietnam, Malaysia, Indonesia)
Product Competitors: Volvo, Mercedes Benz, Tata
Service Competitors: Indian Railways
Pricing: On par with the likes of Volvo and Mercedes Benz
Customer Interface: Bus operators, Government Corporations
End Consumer: Urban population having medium levels of
disposable income
Network: Urban area connectivity
6

7. India’s Transport System
Air, Rail & Road
With respect to the average middle class Indian
Airways – Time saving but extremely
expensive
Railways – Cheap, but erratic and extremely
crowded
Roadways – Reasonably priced but lack of
options
The Golden Quadrilateral and the NSEW
Corridor and the emergence of the luxury bus
market has changed the landscape
India has the 2nd largest road network in the
world (4,320,000kms)
India planned to spend approximately US$500
Billion according to the 11th Five Year Plan to
modernize its highway network
Source: http://www.nhai.org, http://web.worldbank.org, KPMG Report 2011 7

8. Luxury Bus Market in India
Currently 41% Indians use buses as their primary mode of
transport (NHAI Report 2010)
The bus penetration is amongst the lowest in India at 0.75 bus for
every 1000 people (NHAI Report 2010)
India - 2nd largest luxury bus market, after China selling over
46,000 buses in 2011
The luxury bus segment, is expected to grow by 20 per cent, year-
on-year
With increasing urbanization, the demand for luxury buses is
growing at a rapid rate
Hartmut Schick (Global Head, Daimler Buses) expects it to reach
80,000 units by 2020
Source: http://www.hindustantimes.com/News-Feed/Auto/Indian-bus-market-will-
8
almost-double-by-2020-Daimler

9. BMW’s footprint in India
#1 brand in the premier car segment in India
Market share rose up from 9% in 2006 to 42% in 2011
3 Series, X1 and 5 Series are CKDs while the rest are CBUs
Assembly plant in Chennai
Will start sourcing components from Indian vendors by 2013
Confidence in Quality – BMW Service Inclusive (BSI)
Extensive dealer network
Promotions: Golf tournaments, wine tasting events and
fashion shows
Source: http://www.team-bhp.com/forum/commercial-vehicles-india/117459-detailed-
9
look-tatas-divo-starbus-ultra-buses

10. BMW’s Competitors in India
Volvo is the current market leader with 76%
market share
Volvo entered India in 2001, & waited for the
industry to mature
Volvo manufactures its buses in India at their
Hoskote plant near Bangalore, with another
plant to be started soon
1st mover advantage helped Volvo set
regulations such as variable bus lengths,
number of seats, etc.
Making India a hub for Asia, heavy localization
Launched Multi-Axle variant in 2010
Source: Business Today - How Volvo changed the way Indians travel 10

11. BMW’s Competitors in India
Claim to fame: Invented the bus
Mercedes-Benz has 13 per cent market
share globally in the luxury bus market
Manufacturers buses in India through a
local JV partner in Sutlej Motors
Priced at (Multi Axle) – Rs. 9 Million (Ex
New Delhi)
Source: http://www.business-standard.com/india/news/mercedes-plans-to-enter-city-
11
bus-market-in-india/397023/

12. BMW’s Competitors in India
Launched Tata Divo in India in Dec
2011
Designed by Hispano Carrocera of
Spain, a Tata subsidiary
The Divo brand and design is sold
all over the world by Hispano
Tata enjoys a phenomenal brand
recognition and after sales
Priced at Rs. 7 million (Ex –
Mumbai)
No multi-axle option available
Source: http://www.team-bhp.com/forum/commercial-vehicles-india/117459- 12
detailed-look-tatas-divo-starbus-ultra-buses

13. References
http://www.forbes.com
http://www.bmw.com
http://www.hindustantimes.com/News-Feed/Auto/Indian-bus-
market-will-almost-double-by-2015-Daimler
http://www.business-standard.com/india/news/mercedes-plans-
to-enter-city-bus-market-in-india/397023/
http://www.nhai.org
http://web.worldbank.org
http://www.business-standard.com/india/news/mercedes-plans-
to-enter-city-bus-market-in-india/397023/
13

14. WHY BMW ?
Despite volatile business conditions, the BMW Group
experienced the best year in 2011 selling 1.67 million vehicles
in 2011
BMW Group is world’s leading premium manufacturer in terms
of sales volume
Manufacture extremely fuel efficient and powerful diesel
engines
WHY LUXURY BUSES ?
Rising population in countries like India, China
Rising oil prices
Inefficient government ticketing systems
Improving road conditions
Increasing tourism
Sources: BMW Annual Report 2011 , Group5_Gutfeel 14