BMW builds in India
BMW is targeting the burgeoing Indian market from withinBMW has opened a brand-new A$50m factory to build 3 and 5 Series cars in Chennai, India. The company says it will pass on the cost savings of local production of its vehicles to Indian customers.
Peter Kronschnabl, President of BMW India, said India had been importing 530d vehicles thus far, but local manufacture of the 5-Series would result in a cost saving of about 40 per cent. In contrast to the import duty on CBUs (completely built units) at around 120 per cent, the duty on CKD (completely knocked down) units was around 35 per cent.
BMW will assemble four models of the 5 Series -- two petrol-engined and two diesels -- and the 320i. The production mix will be split 50/50 between the 5 Series and 3 Series.
BMW expects to sell 1200 cars this year from its Indian facility. In the medium term, sales of 1500 cars per year are anticipated.
The facility is capable of turning out 1700 vehicles annually on a single-shift basis.
Ninety per cent of domestic demand for BMW vehicles would be met from the Chennai facility but the company will continue to import 7 and X Series vehicles to meet local demand, BMW said.
Kronschnabl also said the company would do a thorough market analysis before considering introducing MINI to India. Pending that investigation the small car brand could hit Indian roads sometime in 2009. (Ed: No truth in the rumour, however, that the Cooper Chilli would be renamed to the Cooper Vindaloo.)
Norbert Reithofer, Chairman of the Executive Board of BMW AG, said Asia was emerging as the mainstay of the BMW Group.
A production base in India "underpins our long-term route to profitable growth in Asia," he said.
The Indian car market currently sells around 1.2 million units per annum but is expected to reach 2.2 million by 2015. The premium car segment in India is below 4000 at present, however, it is expected to reach 10,000 units by 2012-13. By way of comparison, BMW sold around 15,000 cars in Australia last year.
Although Indian cars are right-hand steer, there are no plans to source any BMW models for Australia from the Indian assembly plant. BMW has substantial manufacturing facilities in South Africa and the USA and also assembles cars in Thailand and other tariff-affected markets.
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