How BMW is taking the fight to Mercedes in India’s luxury vehicle market
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Last year, the German luxury carmaker closed the gap to Mercedes by just 1,000 vehicles and has set itself to challenge for the top step in 2026. Much of BMW's success came from its iX1, a luxury electric vehicle in the entry-level luxury segment.
Alongside this, a product offensive and dealership expansion have positioned BMW to take the fight to Mercedes as India’s luxury vehicle segment undergoes a transformation. In an interaction with Fortune India, Hardeep Singh Brar, the president and CEO of BMW Group India , talks about how BMW took the fight to Mercedes and what lies ahead in 2026.
Edited excerpts:
Q: 2025 has been a remarkable year for BMW. How did that happen?
Last year was phenomenally good for us. We did about 18,000 units, up from 15,000 plus units in 2024, a growth of close to 15%. Post-COVID-19, we've been growing every year, and the question was: when would this growth stop? But we continued, and our average growth rate has been 14-15% post-Covid-19.
Of course, there are multiple factors. We launched multiple products last year. One of the biggest ones was the electric version of X1, iX1, which has really helped us attract a lot of consumers from the near-premium into the luxury space. That really helped us in growing the segment. We also made changes to the X3, X5, and X7 as well.
So, product offense was the key reason that we grew so well. Besides that, we also grew a network. Our network is now present in 40 cities, with more than 55 sales showrooms and 60+ service centers. Lastly, the financial services arm we have, while there was always a bit of apprehension about the residual value, we brought in the assured buyback product for the electric vehicles we launched last year, so people don't have that apprehension. So, a combination of the product, the network, and the financial services we have really worked in our favour.
Q: In that sense, electrification has also been critical to your success?
I think electrification is a big story for us. So, in 2024, electrification was about 6-7%. In 2025, we have moved up to 20%. In the i7 and iX1, the penetration of electric vehicles was 50% each. While we don't have electric in other models, which is why the overall is 20%, wherever we are present, the penetration is 50%, which is unheard of for any other brand with an equivalent ICE and electric. This is a very unique case that we are having 50-50% penetration. And one reason is that our pricing for electric and ICE is almost the same. So, you don't have to say that I'm paying 15% or 20% delta, and that has really worked for us.
The second reason is that we also shifted to a long-wheelbase strategy a few years ago. So, the IX1 is actually a long-wheelbase model, whereas the X1 is still a short-wheelbase model. So, we have the 3-, 5-, and 7-series. So, all these products are long wheelbase. And since many consumers want to use the rear seat during the week and on weekends, they want to drive themselves. So, it gives them the best of both worlds. So, I think that is another unique thing about BMW that you will not get from many other brands.
Q: You've been in this role for about 6 months now. What is the direction that you want to take BMW going forward?
Electrification and the long-wheelbase strategy have worked very well for us. So I don't want to kind of change just for the sake of it. I think this is a fantastic strategy, and we would like to further build on that. The next one is the network expansion. We are present in 40 cities, and we are seeing many customers from the next set of cities also buying into premium/luxury. So, we want to add another 10 cities to get closer to customers. So, these 2 are big strategies that we will work on. But we also want to introduce new products in our financial services that cater to consumer needs.
Q: So, how's 2026 looking? Will you be closing the gap to Mercedes?
I think nobody minds being at the top of the table, but we are not blindly following the numbers. We want the growth to be profitable. The customer experience is very, very important to us. The brand value is very, very important. So, we don't want any drastic measures that impact brand value, residual value, or the customer experience. So, we want it to be very organic growth, and we will continue to look at the fundamentals. And in the process, if we become number one, I don't think anybody minds that.
Q: But what would you say are the challenges to getting there?
I think we are well-equipped. The competition would also not sit idle. We can see a couple of launches from them in the recent past as well, so you know they can add more volume with every new launch. But otherwise, internally, I don't see any challenge. And whatever challenges are there, for example, the macroeconomic challenges, the geopolitical challenges, it is the same for all of us in the luxury segment. So those challenges will be common. I think the difference will come from our strategies, the number of new launches, and the network's expansion. I think this is where the final magic lies.