An invisible hand guided the BMW India president to this country, but visible commitment took the company to No 1 in just three years.
Perhaps I had failed to mask my fleeting incredulity when Peter Kronschnabl said he was a quick decision maker. A little while ago, as we sat down to lunch at the sprawling Zest in DLF Emporio in Delhi’s Vasant Kunj, Kronschnabl had looked uncertain, and admitted as much. Not quite sure what we wanted to eat, we had opted for the buffet, writes Suveen K Sinha. Now, noticing the look I should have been able to hide, he offers, with a smile: “I was not sure what to eat, but I did take a quick decision to go in for the buffet rather than a la carte.”
Kronschnabl does manage to blend things which, to the naked eye, would seem to be at variance with one another. How would you imagine a German businessman who has driven Bayerische Motoren Werke (that’s BMW, stupid!) from zero to number one among luxury car makers in India in just three years, overtaking a rival which has been around for half a century? Grim, perhaps, and personifying his country’s, and his company’s, mechanical efficiency? Someone who would have spanners for starters and shock-absorbers for the main course? Actually, the youthful 43-year-old president of BMW India is warm, with a ready smile, and is easy to talk to, with eyes that twinkle with some secret joke he has cracked to himself.
You would know what I am talking about if you were an avid viewer of business news channels. Kronschnabl spent considerable time on CNBC-TV18 as the guest editor of its show on marketing, holding forth across the table as well as reporting from New Delhi’s Auto Expo. He spent the equivalent of two full working days on the show. “I wanted to identify myself with it, not just be the guest editor. If you do something, do it right, or don’t do it.”
That’s how BMW came to India, a market in which global arch rival Mercedes was the synonym for the successful businessman’s car. From the beginning, BMW shunned the idea of a joint venture and set up a fully-owned subsidiary. It sought to make everything match international standards. Going against conventional wisdom, which says luxury car buyers do not go to dealerships and wait for the car to come into their driveway, BMW invested in showrooms that would look the same as those in, say, London. It also set up a BMW studio in Janpath, only the second in the world after Tokyo, to provide the complete experience. It forged partnerships to provide finance and insurance for its cars, so that everything would be done under the BMW umbrella. The company has applied for a licence to operate as a non-bank finance company.
Declining the alcoholic drinks on offer with the buffet, Kronschnabl settles for orange juice. I ask for a Coke, which he says is the American choice with food. Germans prefer wine or beer, but he wouldn’t have either because he is a “working president” and cannot afford to feel lethargic in the afternoon. And he has been working on the Indian market for six years now.
“I looked at the existing dealerships and most of them looked like covered parking. You want to give customers an experience, not just show five cars parked next to one another. In that sense, we have the largest luxury car dealership network, really luxury car dealership, in the country. We were the first to establish a luxury car brand as it should be established.” In the event, the company overshot its target and became number one a year ahead of its own anticipation.
We raid the expansive starters counters. He comes back with some bacon, which I recognise, and other things I do not. I, keen to focus on the conversation, pick just bits of smoked chicken and some cold cuts. With a touch of satisfaction that has little to do with the food, Kronschnabl says he was General Manager, Market Development, at BMW’s headquarters in Munich when the company first seriously thought of entering India. Having planned forays into Poland and Hungary and having drawn up the expansion plan for the European Union, he was put in charge of Project India. Starting with a two-week fact-finding tour of the country in September 2004, he conducted extensive research, including taking potential dealers to Munich, to conclude that India had a sizeable demand for luxury cars.
In the normal course, he would be done by that stage and head to his post in Munich. But the BMW bosses, who believe that normally a person’s shelf life in a managerial function is three to three and a half years, asked him to make good his own report and head the India operations.
“Is that all you will eat?” asks Kronschnabl, seeing the four dimsums I have come back with. I look at his noodles and Thai curry and it dawns on me that we may not get any more trips to the counters. I resolve to quell my hunger with dessert and get him back on Project India, which sort of completed the circle of his association with the country. The Berlin wall fell when Kronschnabl was doing the mandatory 18-month “draft” with the military. Back in college in the re-unified Germany, he came to India in the mid-1990s for a dissertation on the prospects for luxury cars in the country. Was it destiny? He is not sure, but feels “an invisible hand” may have been guiding him.
“The bosses asked if I could realise the plans. We have done better than the plans. My plan was that we would be number one in 2010. I’m glad we did it in 2009.” But, is it possible to plan to become number one? You don’t know where the other guy is going to be. “Entering India was like qualifying for the Olympic Games. You don’t go to the Olympics hoping to come second.” When he came to India in late 2006 — perhaps the shift was made easier because he is single — he started with saying that it was his aim to be number one in four years. It did not deter him that everyone looked at him incredulously. “They perhaps thought I was a guy who did not know his competitor had been here for 50 years. But I took it upon myself to convey that message, ‘Yes we can’.” I say that last bit reminds me of someone else. Kronschnabl knows I am referring to US President Barack Obama’s acceptance speech, but, undeterred, says: “I know, but I used it before him.”
So what’s next? “We have to stay number one. But it’s not all about being number one; it is more important to grow profitably.” Coming from him, that’s funny. That’s the sort of thing the number two says. But then, like I told you, Kronschnabl does blend things. Which is on show again when he comes back with a small pastry to match my full plate of goodies. Didn’t he say he wanted the buffet because he was impressed by all the sweets on offer? “Wait till you see my two big scoops of ice cream,” he says, as the eyes twinkle again.