BMW To Invest Rs 130 Crore To Boost India Operations

Alain Brian
Juin 19, 2017

German luxury vehicle manufacturer BMW is investing Rs 130 crore in India to boost its operations.

"Since 2007, we have been consistently investing in India. This year, we are going to increase our investment further to up to Rs 1,250 crore on a cumulative basis", BMW India President Vikram Pawah told ET. Of this Rs. 730 crore has gone into BMW Financial Services. The company is also looking to expand its dealership network in the country. It now has 18 partners and is present in 30 cities. "We have 63 touch-points". BMW also plans to increase their sales outlets from 41 to 50 by 2018. In emerging towns and 30 cities, the firm is engaged in using mobile studios to expand its market. In 2017, BMW's Mobile Studios will cover 50 towns.

On new product launches, he said: "As part of our power to lead strategy, product offensive starts". Local production would help BMW launch the motorcycle at highly competitive prices for the Indian market.

The wait for the BMW Motorrad G310R grows longer as latest reports suggest that the motorcycle will arrive sometime in 2018.

Pawah, however, said that the new 5-Series sedan, which is set for launch later this month, will also take on the EClass. BMW's factory in Chennai now has a capacity of producing 14,000 units in a single shift which is being used to manufacturer 8 out of their 16 models. The company has till now sold about 66,000 cars in India, of which 5 Series account for 30%. Both the bikes will be exported to global markets from India while TVS will also manufacture the TVS Apache RR 310 S inspired from the Akula 310, which will also be based on the same platform.

Of these cars, the volume drivers are assembled locally while the others continue to be brought to India via the CBU route. It started operations in March 2007 and now produces BMW's 1 Series, 3 Series, 3 Series Gran Turismo, 5 Series, 7 Series along with SUVs X1, X3 and X5.

The company also plans to increase its market share in the premium auto segment in India from under 2% to between 5 and 10%. It sold 3,533 units between January and May this year, after registering 14% growth in 2016, with sales of 7,800 units.

Pawah further said the company would be focusing on its power to lead strategy to grow the entire premium vehicle market.

"The idea is to grow the segment". The efforts should be to at least make it 5 percent and eventually 10 per cent of the PV market, he added.

The premium vehicle segment is estimated to be around 35,000 units per annum now.

Asked about GST, he said, "Any cut in tax rate is welcome".

BMW, which began its India run in 2007, was leading the luxury vehicle market till just a few years back, but lost steam as competition became stiffer and Mercedes increased its engagement and product portfolio.

"If we want to achieve results earlier, then the approach should be plug-in hybrids leading to pure electrical vehicles. It can not happen immediately", he said.

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