BMW Chennai facility goes on stream
The German carmaker BMW has said that it would fully pass on the benefit of local production of its 5 series vehicles to Indian customers.The Indian facility went commercial on Thursday. It will produce 3 and 5 series vehicles.
Peter Kronschnabl, President, BMW India, told visiting journalists that BMW had been importing 530d vehicles thus far. Now that the company had just started rolling out the 5 series from the Chengalpattu facility, near Chennai, it was now possible for BMW to pass on the cost reductions to local customers. Local manufacture of 5 series would result in a cost saving of about 40 per cent, he said. 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, he said, would churn out four models of the 5 series vehicles — two petrol and two diesel versions. The price would range between Rs. 37 lakh and Rs. 42 lakh. And, there would be a common price across the country, he added. The President said the 320i vehicle would be priced at Rs. 26.7 lakh.
Addressing a press conference earlier, Mr. Kronschnabl said BMW was confident of selling 1,200 cars this year from its India facility. In the medium term, he expected sales of 1,500 cars. He said the production mix at the India factory would be 50:50 between the 3 and 5 series vehicles. The facility is capable of turning out 1,700 vehicles annually on a single-shift basis.The President reiterated that the company would do a thorough market analysis before considering introducing Mini, the famous small car brand from its portfolio. If all went well, Mini could hit the Indian roads sometime in 2009, he added. He said that 90 per cent of the domestic demand for BMW vehicles would be met from the Chennai facility. The company would continue to import 7 series and X products to meet the local demand. By 2009 all metropolitan cities would have a dealer.
In his opening remarks at the press conference, Norbert Reithofer, Chairman of the Executive Board of BMW AG, said Asia was emerging as the mainstay of the company. A production base in India “underpins our long-term route to profitable growth in Asia,” he said. The Indian car market was around 1.2 million units. This was expected to go up to 2.2 million by 2015, he said. The premium segment volume was also projected to double by then, he added.
Mr. Kronschnabl said the premium car segment in India was below 4,000 at the moment. He expected this to scale up to 10,000 by 2012-13.
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