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BMW to invest Rs 110 crore in India

The company will establish a production and sales subsidiary in Delhi region and expand its dealership network to all metropolitan centres of the country.

india Updated: Nov 07, 2005 13:19 IST

Announcing its formal entry into India, luxury car-maker BMW today said it will set up an assembly plant near Chennai at an initial investment of Rs 110 crore to make 3-series and 5-series model cars starting early 2007 intended solely for domestic consumption.

The German car-maker will also establish a production and sales subsidiary in the Delhi area and expand its dealership network to all metropolitan centres of the country.

However, the company did not declare the capacity of the facility.

"The opening up of the Indian market is an important step in the company's expansion plans in Asia. The Indian automobile market offers significant growth potential in the long term. With our increased presence there, we will be well positioned to fully tap into this potential," Chairman of the Board of Management of BMW AG Helmut Panke said.

BMW is aiming to boost annual output of BMW, MINI and Rolls-Royce model cars in Asia to 150,000 units by 2008. It did not say what its current annual output in the region is.

In fiscal 2004, the company sold 95,482 automobiles in Asia.

The production and sales subsidiary will be owned 100 per cent by BMW Group. The plant will produce BMW 3 Series and 5 Series saloons, and production is intended solely for the local market.

In addition to operating the assembly plant and importing BMW cars, the tasks of the subsidiary will also include developing the dealer organisation, deciding on pricing and product strategy as well as marketing and after sales.

In the medium term, the company will employ around 200 people in India, up to 600 additional jobs will be created in the dealer and service network.

Currently, two intermediary dealers with three outlets represent the BMW Group in the Indian market.

In 2004 financial year, the company delivered 122 BMW brand vehicles through this network. In the first half of 2005, deliveries totalled 100 automobiles.

Owing to the high growth potential, the BMW Group is hopeful of multiplying its annual sales volume with its entry into the Indian market.

BMW's current product portfolio comprises ten model lines - BMW 1 Series, BMW 3 Series, BMW 5 Series, BMW 6 Series, BMW 7 Series, BMW X3, BMW X5, BMW Z4, MINI (One, Cooper, Cooper S, Convertible) and the Rolls-Royce Phantom.