The Hindu Business Line : BMW reveals plan for Indian market

The super luxury passenger car market in India has been starved for choice for years. While a few new cars have been launched in the performance sports segment and in the stratospherically priced super luxury car segment, there have not been any new cars in the relatively more affordable below Rs 50 lakh price range.

No wonder that there has been so much speculation about BMW's — the German luxury marque — plans for the Indian market. The company had revealed little more than sketchy details about the investments in a proposed plant near Chennai.

Roadmap

Though company officials continue to remain tight-lipped about the pricing strategy and the selection of engines for the Indian market, finally, there is more clarity about BMW's foray into the super luxury car market here.

Breaking the ice, while speaking to select presspersons from India, Mr Peter Kronschnabl, President of the newly setup BMW India Pvt Ltd, revealed the company's roadmap for the Indian market.

BMW's India foray is slated for January next year, when the plant will be officially inaugurated and will begin production of the 3 Series models. By February 2007 the 3 Series will be available for entry-level super luxury car customers. Two trim options each will be offered for the petrol and diesel engine versions of the 3 Series.

Pre-assembled Engines

The 5 Series will then follow and may be available in the market by June 2007. This will be the new face-lifted 5 Series model with a new options package, which is yet to be launched globally, Mr Kronschnabl said.

Both the models will be assembled and manufactured in India at the company's Chennai plant. With the exception of a few features that would either be useless without the necessary public infrastructure or legal clearances, most other current features will be carried forward into the models being launched in India.

So, leather seats will be part of the standard package, as would the company's much acclaimed i-Drive control, big screen displays and high-tech dashboard layout. The engines will come pre-assembled from Germany and only engine trimming will be put together in India, Mr Kronschnabl added.

Localisation Strategy

As part of its localisation strategy, the company is targeting a 10 per cent domestic content in terms of value. Locally sourced parts for the two cars are expected to be the car seats, seat leather covers and electronic components for the seats.

The BMW plant in Chennai will be spread over 22 acres and will house departments that will handle logistics and administration, in addition to the assembly line and a small test track. The German parent will supply painted body panels, since setting up a local paint shop will be unviable. A minimum of 10,000 units is needed to make economic sense for investing in a paint shop that can cost upto 30 million, said Mr Kronschnabl.

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