The company, which is beginning its Indian journey with the 3-series and 5-series models, has invested €20 million in setting up this 1700-units-per-year facility.
CHENNAI: The burgeoning luxury car market in the country just got more crowded. German major Bayerische Motoren Werke AG (BMW) has begun production at its manufacturing plant here, its fifth in Asia, and is eyeing sales of 1200 units in the first year. The company, which is beginning its Indian journey with the 3-series and 5-series models, has invested €20 million in setting up this 1700-units-per-year facility.
And how much will your pocket be lighter by if you decide to buy the locally-made BMWs? For the 3-series, the ex-showroom price is in the range of Rs 26.7 lakh to Rs 32 lakh, whereas for the 5-series, it ranges from Rs 37 lakh to Rs 42 lakh.
BMW has already set up eight dealerships in major metros and plans to cover all major cities by 2009. But, while it has decided to bring its luxury cars here, bike lovers will have to wait longer since it has no plan yet to make its bikes here.
But what drove BMW to consider manufacturing in India? Says Norbert Reithofer, chairman of the executive board of BMW AG, “Particularly in the premium automobile segment, India offers big opportunities for growth.”
Between its three flagship models - BMW, Mini and Rolls Royce - the company sold 1,36,000 vehicles across Asia last year and expects this number to jump to 1,50,000 by 2008.
Reithofer says BMW’s long-term goal is to make Asia its mainstay and the entry into the Indian market with locally made models is an important step towards this end. The luxury car market in India is estimated at around 10,000 vehicles per year and expected to double over the next 7-8 years.
And what about localisation? Only the seats for the 3-series and then the door frames for the 5-series cars would be sourced locally for now. On whether the Mini would also be eventually be made in India, Peter Kronschnabl, the president of BMW’s operations here, says, “We will be conducting a market analysis for the Mini this year. If it is found viable, then the Mini would come in 2009.”
Customisation facility would be available only in those BMWs which continue to be imported - such as the M-series cars. In the first year, 90% of the 1,200 unit sales target would be supplied through local production, but 10% would still be imported.
But, isn’t a 1700 completely knocked down (CKD) units plant in India (against a 30,000 unit facility BMW already has in China) rather small? Reithofer says the company follows a well-orchestrated model for expanding its production facility in any country, under which the CKD assembly plant is followed by a paint and body shop, a purchasing department and setting up of a sourcing operation to supply other BMW plants worldwide.
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