Increasing localisation and investment is a big step, but just one step in the long-term growth plans of BMW here, says Philipp von Sahr, President, BMW India.

The German luxury car-maker has invested over ₹490 crore, most of it in increasing capacity at the Chennai plant to about 14,000 units a year in a single shift.

The company has also expanded its components supplier base taking the local base to about 50 per cent.

It gives BMW better control on costs. Normally, BMW resorts to three-four price increases a year, but “now, we can manage with less,” he told BusinessLine .

“We do not have to wait for parts from the US or Europe.”

The plant, set up about 50 km south of Chennai in 2007, started out as an assembling unit for imported completely knocked down kits. Now, it is a full-fledged plant in line with BMW’s long-term plans for India. Locally-made engines, gear boxes, cooling modules, exhaust systems and a lot more go into the BMWs here. The quality is on par with BMW cars made in the US, Europe or China, he added.

The company makes the BMW Series 1, 3, GT, Series 5, 6, 7 and the X1, X3 and X5 here. The focus will continue to be on high-end cars in India.

For the BMW’s headquarters, “it is a highly rated market,” said Sahr.

There is a huge growth potential for the Chennai plant, which has two assembly lines, each capable of making four models. There is room for expansion. If the trade policies are freed, Chennai can potentially reach a number of neighbouring markets and parts of South and West Asia, he said.

Most of the BMW cars on the roads here are from the local production units.

This also explains BMW’s approach to India. Markets in China and Russia are down; in Europe and America, where volumes are high, growth is small.

“So, in the next 10 years, India will be one of the few key markets where you can expect a lot of growth,” Sahr added.

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