BMW to Increase Investment in India as Sales Grow

MUMBAI – BMW India Ltd. sold 3,038 cars and cross/utility vehicles during fiscal 2008-2009, a 40.5% jump from prior-year.

Since January, the auto maker’s growth has slowed to 14%, although deliveries easily could reach 3,500 vehicles by year’s end. BMW India is in the process of increasing the size of its sales network, now at 25 dealers. With a 40% share, it is the leader in the Indian luxury-car market.

BMW India assembles 11 diesel and gasoline variants of its 3- and 5-Series sedans at a recently constructed plant in Chennai. It also imports 11 completely builT-up models, including the X3 and X5 CUVs, 3-Series coupe and convertible and 6- and 7-Series sedans.

The locally produced models sell for Rs2.6million-Rs4.8 million ($54,000-$100,000), and the CBU imports are priced up to Rs13.2 million ($275,000).

Next month, BMW India expects to launch the Z4 2-seater, and at India’s Auto Expo in January, it plans to unveil a yet-to-be-named new model for the domestic market.

To date, BMW has invested Rs1.1 billion ($2.3 million) in its Indian operations and expects to expand capacity when full production of 3,000 units annually is reached.

Peter Kronschnabl, BMW India president, recently confirmed to the media the auto maker will increase investment by 2011.

The auto maker has identified two domestic components suppliers and buys forgings and castings for export to other operations within the BMW Group. In addition, BMW India provides engineering and information technology services to the parent company.

BMW Financial Services also operates in India. It has tied up with Bajaj Allianz General Insurance, ICICI Financial Solutions and Orix Auto Infrastructure Services for vehicle leasing.