Keeping The Wheels Turning

It’s been 30 years of growth for BMW in this region. The regional office of the German marque has seen enviable acceleration as the brand presence is boosted by growth spurts in major markets. Axel Pannes, BMW Group Asia’s Managing Director, reckons the ride will continue albeit in unpredictable waters. By Kannan Chandran

The reach that BMW Group Asia exerts is extensive. While it has market responsibility for Southeast Asia, it manages all importers in the Asia-Pacific region — from Tahiti, which imported the first BMW car into this region, in 1967, to China, and Singapore, where Performance Motors was established as the exclusive distributor fo BMW cars and motorcycles, in 1979. There have been several changes since, with Munich Automobiles setting up in Singapore as the first BMW M Dealership in the world. Increasingly, the world’s focus has also shifted towards Asia as a region of growing influence.

BMW set up its Asia office in Singapore, in 1985. In the three decades, the brand has performed spectacularly well, riding the various regional and global crises, but also forging strong relationships with customers and partners with its various brands — BMW, Rolls-Royce and MINI.

Along the way, countries like China have blazed a trail up the ranks; from a virtual unknown on the BMW sales map to the country that leads in global sales volume for the brand. Having nurtured markets with critical mass like China, Malaysia, Indonesia Thailand and Korea, into stand-alone entities, the focus is on shaping the 14 countries in BMW Asia’s current portfolio.

In its 30 years, BMW Asia has seen several managing directors chart the organisation’s progress in the region. Axel Pannes, its eleventh, and current Managing Director, brings a variety of experiences to the top seat in the region.

After a spell working on Daimler’s Smart car project, he joined BMW Group in 2002, working his way up through sales and marketing, business development, sales channel strategy, retail development for BMW and a spell with Rolls-Royce. A people person, Pannes brings his various experiences to bear in a region that comprises a multitude of cultures, government policies and affluence.

This is a challenge that Pannes relishes — developing businesses. With the three brands — BMW, Rolls-Royce and MINI — offering their own product lines and appealing to different market segments, the pressure will be to keep BMW’s nose ahead in the quest for the affluent dollar. Also, to make the kind of decisions that will continue to bring success to the brand for years to come.

STORM: A challenge of operating in this region would be the different government policies towards automobiles. Doesn’t this make planning a difficult exercise? (Singapore is fond of changing the rules at short notice, like the policy to contain Category A certificates of entitlement to cars with engine capacity up to 1,600cc and producing up to 97kW of power.)

AXEL PANNES: That’s true, especially in my role, being in charge of 14 different countries. I have 14 different sets of rules to deal with, and these rules are sometimes changing very rapidly.

It’s also important to anticipate with our partners, dealers and importers, what is going to happen, because they are investing a lot of money in the business, and they are also dependent on the changes made by the respective governments. If the authorities change the business rules from one day to the other, our partners’ businesses are also forced to change.

With the change in COE structure, we are kept out of more than 50% of the market right now, because we don’t have something to offer in Category A. To be honest, I think we are penalised for producing very efficient engines because BMW is always trying to maximise the output and minimise the emissions.

Our emissions are on par with the competition but our power output is higher, so our competitors are able to sell cars, because they are below the limit set by the authorities. It’s always difficult to anticipate how these policy decisions will go. But the lifespan of a model is seven years, so we have to make decisions for the longer term; we can’t make decisions today for tomorrow.

If there is an engine available we would definitely offer it, but people don’t develop cars just for Singapore.

We can only offer a diesel engine for the Category A segment in the near future, but diesel is not so popular because you don’t drive long distances in Singapore. If you have to drive 200–300km per day, then diesel becomes a viable option because of its efficiency.

Pannes in the BMW i8 that was handed over to the BMW-NTU Future Mobility Research Lab, at the Nanyang Technological University.
Pannes in the BMW i8 that was handed over to the BMW-NTU Future Mobility Research Lab, at the Nanyang Technological University.

STORM: How will the electric car fare in this region?

PANNES: Singapore is the first market in this region to have the i cars. But we had a Malaysian customer who insisted on having the i8. If there’s a problem with the car, we have to fly in someone to fix it at the customer’s expense. Only a few people are allowed to work on the electric cars. Training on the BMW electric cars is one of the longest for the brand, taking around 90 days.

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