The German carmaker BMW launched its operations in Nepal in partnership with Cosmic Automobiles last week. BMW's latest models have Siemens microelectric components that are manufactured in Nepal. Senior Vice-president for Sales, Luder Paysen, told Nepali Times in this interview that although the Nepal market is small, the company wants to serve BMW buffs here too.
Nepali Times: Somehow one doesn't associate a luxury car like BMW with Nepali economic and road conditions.
Luder Paysen: Of course, Nepal will never be a major market. Selling the car is quite easy, but it is the after sales service, and we have found a very good partner in Nepal with a lot of experience who understands the BMW. It will not be a big market, but they will establish a showroom and after sales service.
With a BMW you are not just selling a car, your are not just selling transportation equipment to take you from point A to point B. You are selling the expression of a lifestyle. That expression could be that they want to be seen as young at heart, or someone who enjoys driving. So we have a very agile and dynamic car, a sporty car, but it doesn't mean that our customers are young necessarily. In Germany many of our customers are 40-50 years or older. In Nepal we may sell 10-20 cars a year. But that is not the issue, the issue is if there are people who can afford a BMW who have a BMW, we want to serve them.
How come you sold off Landrover?
We have divested from Landrover, and decided to concentrate on premium cars. But we do have off-road cars, the X5 and these off-road vehicles are extremely successful. There are just a few manufacturers of premium cars in the world and we really wanted to concentrate on that. Last year we sold about one million cars and this number is growing every year, and the growth will be in Asia, not in Europe or the US. The growth of premium cars like Mercedes, Jaguar, BMWs is also much faster in Asia. 
Within Asia, how does the Chinese market compare with India?
In Asia at present we sell about seven percent of our cars, with the rest in Europe and the US. In the medium term, we want to sell 20 percent of our products in Asia and for that reason we started a presence in all major markets with subsidiaries in Asia. We just established a joint venture in China, where we produce and sell our cars. We expect to produce about 30,000 cars per year in China .
With regards with India, for us it has always been a very important market and six years ago we tried to set up an assembly plant and a sales subsidiary joint venture with a local partner, Hero. We even have a company, BMW India. But this didn't go through because of the policy in India at that time that foreign partners to invest at lest $50 million and then they also asked that local content be 80 percent, which was impossible for us. They also had foreign currency repatriation restrictions. But now the policy has been changed, and therefore we are studying a re-entry into the Indian market with an assembly and sales subsidiary.
The Indian and the Chinese markets are completely different for us. In China, we find that when an individual is successful he wants to show off his success, a car is used to express his lifestyle. India is different, our target group is not necessarily interested in expressing their lifestyle through their vehicle. So, therefore I think it will take some time to establish a BMW market. In India, as in Nepal, you don't have the best road conditions but we test our cars on Indian roads so they are adjusted to perform well on the roads here.
How are you responding to ecological worries about fossil fuels?
Our solution for the longterm is hydrogen cars, and we will introduce our top model with hydrogen fuel engines in the next five years. The point is the whole infrastructure. In Europe, manufacturers are concentrating on the ecological advantages of going diesel, the Japanese are concentrating on hybrid cars, and we have decided to concentrate on hydro-fuels. But it will take another 20-30 years before these advanced concepts are implemented in the market
