The European major has set up an assembly plant at Chennai from where it rolls out the 3-series and 5-series sedans, committing €20 million investment in the process. But more action is on the way.
NEW DELHI: German luxury carmaker BMW has chosen 2007 as the ‘Year of India’ across global operations, and not without reason. The European major has set up an assembly plant at Chennai from where it rolls out the 3-series and 5-series sedans, committing €20 million investment in the process. But more action is on the way.
BMW is now thinking of ramping up component sourcing from India even as it evaluates the market potential for its famous Mini and 7-series cars. Already, the company has showcased the three-litre diesel version of the brand new car X5 in India (ahead of launching this vehicle in the UK) and plans to bring the famous BMW art collection - two cars painted by renowned artists - to the country later this year.
It is entirely possible that not only its famous cars, but even bikes from the BMW stable may also be seen here sometime in the near future!
Peter Kronschnabl, president of BMW India, is already bullish on India. He has revised the sales target for 2007 to 1,200 units against just 257 cars sold last fiscal and has signed on four new dealerships. These will be in place over the next few months.
“BMW is focused on India and we think this market has very good potential. We are evaluating India for our Mini and 7-series cars at the moment. With the premium car segment expected to grow at a healthy rate, we are looking at expanding BMW’s presence here,” he said.
As a preliminary, the company is setting up an international purchase office in New Delhi that will evaluate options for increased component sourcing. Kronschnabl did not reveal outsourcing targets, but did say that some IT components are being sourced from India. The office is expected to be operational by August and would be independent of the India operations and directly report to Munich headquarters.
Kronschnabl added a study is on to find out the feasibility of launching the Mini. Despite it being a “small” car, the Mini would not come cheap - at home in Germany, it costs around Rs 10 lakh, so imports into India as CBU would inflate its price to Rs 18-20 lakh range. The same is the case with the 7-series cars, which are also in the super premium bracket.
The locally assembled 3-series, on the other hand, is priced between Rs 26.7-32 lakh, whereas for the 5-series would cost Rs 37-42 lakh.
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