Amity Business School

Report

On

Company Visit to BMW Bird Automotive Gurgaon







In partial fulfilment of the requirement of the degree
Of
BTech Mechanical and Automation Engineering + Masters in Business Administration
(2010 2015)



Under the Supervision of
Dr. Shyam Sunder Pal
Professor
Department of Operations Management
Amity Business School
Amity University, Noida
Prepared and Submitted by
Achyut Chandra A2325010001
Shoumik Goswami A2325010002
Siddhartha Gandhi A2325010004
Utsav Khurana A2325010005
Shikhar Agnihotri A2325010007
Ambuj Kumar A2325010010
Arnab Goswami A2325010014



Acknowledgement
As a part of the Productions and Operations Management curriculum at Amity Business School,
the Project Work enables the students to enhance their skills, expand their craniums by
applying various theories, concepts and laws to real life scenario which would further prepare the
students to face in the near future.
The project is an outcome and result of extensive work done in the area of Production and
Operations management studied while undergoing a corporate visit to BMW Bird Automotive,
Gurgaon.
We would like to acknowledge our faculty, Dr. Shyam Sunder Pal, Professor, Department of
Operations Management for his continuous support and guidance.
In addition, we would like to extend our heartfelt appreciation to Mr. Anil Gandhi, GM Sales,
BMW Bird Automotive, Gurgaon for his consistent support throughout the tenure of the work.
A well combination of theory and practice helped us in compiling this report on Company Visit
to BMW Bird Automotive Gurgaon














Table of Contents
1.0 Introduction
1.1 BMW Group India
1.2 BMW Plant Chennai
1.3 Model Range
1.3.1 Mini India
1.4 BMW Financial Services India
1.5 International Purchasing Office (IPO)
2.0 Production and Operations Management Project Work
2.2 The Question(s) and Answer(s)
2.2.1How do customers perceive your Brand image and how has it changed in the last five years?
2.2.2 What are the customer segments, BMW primarily focuses on and what are the pricing
strategies it sets to follow?
2.2.3 How has BMW focused on innovations in the last 5 years? What are the essential steps it
has adopted?
2.2.4 We have recently learned that Bird Automotive Gurgaon has been ranked and appreciated
for customer satisfaction. What factors do you believe have contributed to have achieved such a
merit?
2.2.5 How do you plan your Supply Chain Inventory and logistics with the seasonal or
fluctuating demands?
2.2.5 How do you plan your Supply Chain Inventory and logistics with the seasonal or
fluctuating demands?
2.2.6 With respect to the companys vision and mission, what aspect does BMW find is the key
to its growth in the automobile sector?
2.2.7 What are BMWs promotional strategies and what are the strategies that have been
instrumental to Bird Automotives marketing and sales plan?
2.2.8 What is the companys turnover and how do you plan to increase it in the next five years?
2.2.9 Recently BMW has launched its BMW 1 Series in the Indian Market which directly
competes with the Mercedes A Class. What would the organization look forward to achieving a
competitive advantage?


1.0 Introduction
BMW India is a subsidiary of the BMW Group, headquartered at Gurgaon near New Delhi in the
National Capital Region. BMW India also has its own manufacturing facility in Chennai. BMW
has been the No.1 global luxury brand for nine consecutive years. Currently, it is in 11
th
position
among the top leading brands worldwide. All BMW cars are manufactured on a sports chassis
and have a 50:50 weight distribution which is unique only to BMW cars. They are ranked No.1
globally for their complete customer satisfaction and they believe that Word of mouth is more
valuable than awards or certificates. The automobiles have an optimum combination of power
and efficiency which is another strategy followed by BMW for market success.
1.1 BMW Group India
BMW Group has invested 1.8 billion Indian Rupees. The wide range of BMW activities in India
include the establishment of a manufacturing plant in Chennai, a parts warehouse in Mumbai and
development of a dealer organization across major metropolitan centers of the country. The total
number of employees at BMW India is 650. More than 1,200 additional jobs have been created
in the dealer and service network. By end of 2014, BMW India will expand its dealer network by
increasing the number of sales outlets to 50 across major metropolitan centers and emerging
markets in India.

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1.2 BMW Plant Chennai
The BMW Plant Chennai produces the BMW 3 Series, the BMW 5 Series, the BMW 7 Series,
the BMW X1, the BMW X3 and the MINI Countryman. In 2013, the BMW Plant Chennai will
also produce the BMW 1 Series. The factory has the capacity to manufacture 11,000 units per
year on a double shift basis.
1.3 Model Range
BMW dealerships presently display the BMW 3 Series, the BMW 5 Series, the BMW 7 Series,
the BMW X1 and the BMW X3 that are produced at the BMW Plant Chennai. BMW dealerships
also display the BMW 6 Series Coupe, the BMW 6 Series Convertible, the BMW 6 Series Gran
Coupe, the BMW X5, the BMW X6, the BMW Z4 and the BMW Gran Turismo which are
available in the country as Completely Built-up Units (CBUs). The BMW M3 Convertible, the
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Revenue generation across the globe (million euros)
2010 2011 2012
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Average workforce during the year
2010 2011 2012
BMW M5, the BMW M6 Coupe, the BMW M6 Convertible, the BMW 6 Series Individual and
the BMW 7 Series Individual can also be ordered as CBUs at BMW India dealerships.
1.3.1 Mini India
The BMW Group introduced Mini marque in India in January 2012 with the launch of Mini
Hatch, Convertible and Countryman. India is the 100th market in the global MINI sales network
and has become increasingly significant for the BMW Group since establishing its presence in
India in 2007. The Countryman is locally manufactured at the BMW Plant Chennai in diesel and
petrol variants. The Hatch and Convertible models are imported to India as Completely Built-up
Units (CBU) in petrol variants.
1.4 BMW Financial Services India
BMW Financial Services India is a 100% subsidiary of the BMW Group and is headquartered in
Gurgaon (National Capital Region). Till date, BMW Group has invested 5.3 billion Indian
Rupees (US $ 106 million). BMW Financial Services India operates with three business lines:
Retail Finance, Commercial Finance and Insurance Solutions (through cooperation partners).
The services offered through BMW Financial Services are significantly valuable to the premium
clientele who require exclusive and flexible financial solutions. Service excellence is the primary
focus of operations across all business lines. BMW Financial Services India offers solutions for
retail automobile financing for BMW customers and multi make customers, financing for fleet
owners and commercial financing for BMW dealerships and multi make dealerships.
Commercial finance solutions offered to BMW India dealerships further strengthen operations in
the country and reinforce the BMW brand. BMW Financial Services India also offers BMW
Lease for individuals and corporate customers. BMW Financial Services offers insurance
solutions to its customers through its cooperation partner in India.
1.5 International Purchasing Office (IPO)
The International Purchasing Office (IPO) established at BMW Indias Headquarters in Gurgaon
identifies and assesses potential suppliers for BMW, MINI, and BMW Motorcycles taking into
account BMW Groups requirements for quality, technology and logistics. The IPO strongly
focuses on increasing the sourcing of production material (components) as well as IT and
engineering services from India to the BMW Group International Production Network.
2.0 Production and Operations Management Project Work
The project assigned to the group was to visit any Micro Small and Medium Enterprise (MSME)
and find out certain parameters of operations which influence each and every market and sector.
These parameters were namely, their salable products, inputs they consume, conversion process
and productivity, innovations in products and processes, interesting decisions of the firm and
actions taken(if any), and any other decision process which is used in their regular framework. It
was necessary to notice that the questions and answers are not judgemental and may vary from
individual decision maker's perception and thinking.

2.2 The Question(s) and Answer(s)
2.2.1How do customers perceive your Brand image and how has it changed in the last five
years?
BMW being the leader in luxury and sports cars, is ranked 11
th
in terms of Brand Perception
across the Globe. Its competitors, namely Mercedes and Audi are ranked 27
th
and 28
th
for the
same criteria. BMW owes its excellent brand image to the advanced technology that is uses in all
its automobiles and this is what makes BMW a market leader in the Automobile Sector.
2.2.2 What are the customer segments, BMW primarily focuses on and what are the
pricing strategies it sets to follow?
BMW was, is and will be the prime option for the luxury and sports segment. It can be said as
the leader for optimally pricing and setting its product in line with the customer expectations.
India being essential to price sensitization has been endowed with BMWs star products, namely
the BMW 3 Series, 3 Series (GT), 5 Series, X1, 1 Series, X3, X5 and other associate models such
as Mini and Rolls Royce. The BMW 3 Series and 5 Series have been marked as the models
contributing to 70 % of sales and hence they have been instrumental to BMWs forthcoming
promotional strategies. Unlike other Automobile manufacturers , BMW does not believe in
sudden price fluctuations in cases of demand supply shortfall as it believes that it will hamper the
excellent brand name in terms of luxury and sports.
2.2.3 How has BMW focused on innovations in the last 5 years? What are the essential
steps it has adopted?
BMW has moved swiftly in this competitive market with having utmost machine superiority and
highest horsepower configurations along with supreme factors contributing to efficiency and
engine output. BMW has showcased some increasingly beneficent innovations which have lead
to the carmaker in transforming the overall luxury and sports car scenario. These can be
quantitatively explained as
(i) All cars being built on sports chassis having a 50:50 weight distribution. In addition,
they also have an eight speed transmission.
(ii) All vehicles having Run Flat Tire technology and the company dealers taking
complete care of the vehicle for the first year.
(iii) In terms of safety, all cars are 5 Star certified complying with Euro NCAP norms.In
addition, all cars comply to the recent emission norms for better environment friendly
vehicles plying on tracks and roads.
(iv) In line with the BMW motto of Efficient Dynamics , the company sets to introduce
hybrid technologies working in tandem with luxury and sports amenities.
2.2.4 We have recently learned that Bird Automotive Gurgaon has been ranked and
appreciated for customer satisfaction. What factors do you believe have contributed to
have achieved such a merit?
The focus of BMW has been Customer Satisfaction from the very beginning and it feels to
have been honored with such a prestigious award. It goes to show the organizational
commitment towards achieving customer satisfaction. BMW has achieved a rank of being No. 1
in India followed by their adversaries, viz. Audi, Mercedes, etc. In addition, Bird Automotive
Gurgaon, Delhi (NCR) has been judged as the No. 1 dealer of BMW in terms of customer
satisfaction which the company feels is a great honor.
Bird Automotive Gurgaon has and will be committed to the highest level of customer satisfaction
and has some key services which it feels have been instrumental in achieving them such a spot.
They are-
(i) Condition based services where there is a special plan for each customer according to
his/her own requirements.
(ii) The dealer offers various incentive based packages to its esteemed customers in terms
of costs, insurance, etc.
(iii) Onsite maintenance has been instrumental in ensuring the popularity of Bird
Automotive to its loyal customers.
(iv) Tie ups with various Insurance providers like ICICI Bank, Bajaj Finance, etc
2.2.5 How do you plan your Supply Chain Inventory and logistics with the seasonal or
fluctuating demands?
Market behavior is anticipated at very early stages during regular management meets and
discussion. Effective planning strategies among all the functional departments are formulated at
the start of the financial year. Regular changes are done in quarterly intervals and are then
implemented. The lead time being 6 months resulting in production, planning , implementation
and control procedures being thought of after every meet and the requirements of inventory
requirement is sent to the production and plant areas, viz. Chennai in India. An example can be
thought of as a production request being sent to the plant on 30th January for the month of 1st
July.
The demand is based on the availability in the principal plant for the particular model. A plan is
charted accordingly after confirmations from the plant area. In case of discrepancies, the supply
order is shifted to the next quarter. The inventory is generally kept at 1.7 % of the monthly sales
with fluctuations amounting to varying demand forecasting figures.
The waiting period for all CKD (Completely Knock Down) units, viz. 3 Series is 3-4 months.
During the meet, the management decides the final inventory call and period. All the decisions
are made in cohesion with the customer requirements and demand forecasting done at regular
intervals.
2.2.6 With respect to the companys vision and mission, what aspect does BMW find is the
key to its growth in the automobile sector?
The organization being the leader in the segment has various mottos such as 'Efficient Dynamics'
and 'Sheer Driving Pleasure'. As concluded from the talk, it can be safely concluded that effects
like market slowdown, sector specific growth does not hinder in the organization's goals of
achieving maximum market capture in its sector, which is a niche market.
2.2.7 What are BMWs promotional strategies and what are the strategies that have been
instrumental to Bird Automotives marketing and sales plan?
The strategies BMW sets to adopt is to achieve maximum market capture in its sector, i.e. the
automobile luxury and sports car sector which is a niche market. There are many marketing and
advertising campaigns which BMW dealers execute in India, for example, During the launch of
the 3 Series BMW had set out to various Universities (of which Amity University was also a part
of) as well for greater brand and product outreach.
The brand outreach is complimented by various factors such as -
(i) Different Designs for each segment and for each customer
(ii) A sense of 'More Luxury' in each and every car while compensating for performance which
is essential to BMW's mission and vision.
(iii) BMW being the leader in the field of luxury and sport automotive manufacturer focuses on
designs which are unique and different from others.
2.2.8 What is the companys turnover and how do you plan to increase it in the next five
years?
While the exact figure of the dealer remains to be confidential within the premises of the
organization, it is clear that Gross Profit of the form is at an increase and will be aimed for the
same in the next many years.
2.2.9 Recently BMW has launched its BMW 1 Series in the Indian Market which directly
competes with the Mercedes A Class. What would the organization look forward to
achieving a competitive advantage?
BMW believes in setting itself apart from other adversaries. The reason is its superior
technology, efficient dynamics and excellent customer outreach. BMW has also achieved a rank
of being No.1 in its segment for the last three years and sets itself apart from others by various
reasons listed earlier in the document.



3.0 Conclusions

4.0 References