BMW hikes Chennai plant capacity 80%

German luxury carmaker BMW has hiked production capacity at its Chennai plant to 5,400 units per annum from the current 3,000 and will make a fresh investment of Rs70 crore by 2012.

More importantly, it will take a call within a month on entering the Indian two-wheeler market with its famed bikes.

“BMW Group is tapping new growth potential and will further increase its commitments in India. To this end, we will step up our investments in India,” BMW India president Andreas Schaaf said.

The company has so far invested Rs110 crore at Chennai, which had an installed annual production capacity of 3,000 units. “The plant in Chennai has recently increased its production capacity to 5,400 units per year on a single-shift basis,” he said.

Schaaf said the fresh investment will enable further capacity addition but did not specify the quantum.

“The plant will be structurally expanded to increase the production capacity further. Around 18 acres of additional land will be procured from Mahindra World City for this expansion...Currently, the plant is spread over 21 acres,” he said.

A new vehicle despatch centre will also be constructed inside the facility by 2012, he
said.

On future product launches, he said: “In 2010-11, we will resolutely expand our product range and thus cover all the opportunities in the luxury segment. The new BMW X1 is scheduled to be launched in India by the end of 2010. The new X1 will be CKD, produced at the Chennai plant.”

The company on Tuesday launched its new sports utility vehicle X5 in both petrol and diesel variants, priced between Rs52.99 lakh and Rs69.50 lakh.

On the company’s plans for the two-wheeler segment in India, Schaaf said, “There are investigations going on. We will decide in a couple of weeks whether it makes sense to enter the market or not...In a month’s time, the announcement will be made.”