The war of the luxury cars in Thailand is basically between two main players: Mercedes-Benz and BMW. While there are other players globally, such as Audi, Volkswagen, Lexus and Infiniti, they do not assemble their vehicles locally. Due to Thailand's complicated tax structure, cars can only be sold at reasonable prices if they are imported as completely knocked-down units and put together within the country.
The competition between the big players has always been neck and neck, with BMW always coming in second. But all of that seems set to change, if we are to go by what BMW Thailand's new president, Michael Kordys, has to say.
"My mission in Thailand is to boost sales. I have faith in the products of BMW and know that we can achieve more in Thailand. In the coming years, our focus will be on expanding our dealerships and providing the best service we can to our customers," Kordys said.
The company sold 2,822 units last year, including both BMWs and Minis. That was 12.79 per cent more than the previous year's 2,502 units and a growth rate higher than all other countries in the region. Sales in Malaysia grew 8.1 per cent to 3,472 vehicles, while Singapore sold 3,857 vehicles for 6.4-per-cent growth. In the Philippines, sales grew 0.1 per cent to 803 vehicles, while Indonesian sales dropped 52 per cent to 600 vehicles.
Thailand is in third place for BMW in Asean, behind Singapore and Malaysia. The Philippines and Indonesia come in fourth and fifth.
BMW sales in Thailand represented 41 per cent of the total premium market last year.
"To get the required sales boost and provide better services, we will increase our dealerships. We currently have 10 dealers in Bangkok and 11 upcountry. By the end of 2007, we hope to have three new dealers and two additional service satellites. Two of these dealers will be BMW and one Mini. The Mini showroom will be the largest of its type in the world.
"Along with this, we plan to have innovative offers for our customers. But considering the current political and economic conditions in Thailand, we will be happy if we are able to maintain the sales that we achieved last year," Kordys said.
He said the current dealer network in Thailand is very strong and that he hoped to build on this. "Work hard but fair" is the policy he hopes the dealers will adopt.
Service satellites are dispatch sites for service vehicles that provide roadside assistance and other services for all BMWs under the BMW Service Inclusive (BSI) plan. All BMWs come with BSI, which is incorporated into the price of the vehicle. The system allows customers to drive worry-free for three years.
"There is definitely a huge market for 'traditional' premium cars here, and the market will probably grow. To expand our market, we provide more entry-level models like the BMW 318i that is more affordable to younger customers. We believe this is the right way to go. Cutting the prices of our vehicles will definitely not be an option," Kordys said.
The company also launched its diesel range in Thailand last year. Its 520d models sold out last year, and customer reaction to the vehicle has been very good.
There are further plans to integrate diesel engines into the BMW range, although Kordys did not say in which models or when it will happen.
"We are currently in the process of understanding the market for diesels in Thailand. We do not want the diesel range to cannibalise our petrol range. From past experience in Germany [where the diesel share is 45 per cent], we have learned that it takes time for the market to adjust to diesel engines. Unlike our competitors, we do not intend to introduce diesel engines in many of our products right now, definitely not this year. Sometimes it is better to be the best rather than the first in terms of sales figures," Kordys said.
The company launched two new models this year. The X5 4.8-litre and the 3 series convertible were launched at the 28th Bangkok International Motor Show. Industry analysts believe the production levels at BMW's Rayong assembly plant do not justify the company's investment in Thailand. But the company says otherwise.
"We know ourselves the best, and our assembly plant is a very efficient one," Kordys said. "Currently, there are four models on the production line: the 3-Series, 5-Series, 7-Series and the X3. We are also looking at exporting more units in the future as the diesel
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