BMW, the luxury car maker, is planning to infuse Rs 70 crore in its Indian operations. The group, which has its production plant near here, has said it will soon to start to produce new variants from this plant and this would generate 1,200 jobs, directly and indirectly.
Andreas Schaaf, president, BMW India, the 100 per cent subsidiary of BMW Group, said it had invested Rs 110 crore till September and this would be increased to Rs 180 crore by the end of 2012.
The company commenced production in 2007 from Chennai. It produces the BMW 3 Series and BMW 5 Series sedans in petrol and diesel variants. By the end of 2010, the plant will also start producing the BMW X1.
Currently, the plant has the capacity to produce 5,400 units per year on a single shift. It will employ around 400 people by the end of 2010. Up to 1,200 jobs will be created in the dealer and service network by 2012, he added.
“India is a market that holds great potential for the future for us and is a building block in our global market offensive. Our success so far has proved that our production-follows-the-market strategy, which has already been successful in markets such as the US and China, is the right approach,” said Frank-Peter Arndt, member of the Board of Management of BMW AG, responsible for production.
“At the same time as we are expanding capacity, we will also be gearing the plant to produce a further model for the Indian market, the X1, starting in November and thereby opening up new customer segments,” he said.
In addition to strengthening capacity, a new vehicle logistics centre will also be set up on the grounds of the Chennai plant, for which land has already been acquired.
In 2011, BMW India will expand its dealer network by increasing the number of outlets to 22 across major metropolitan centres, from the current 18. The present dealer network of the company covers 95 per cent of the sales potential of the premium car segment in India These dealerships presently display the two series produced from the plant near Chennai and another seven variants available in the country as completely built-up units.
Earlier this month, the group launched its financial services arm in India. BMW Financial Services is a 100 per cent subsidiary and the group will invest Rs 230 crore in the new arm.
Bauer said the new company was a critical element of the market expansion strategy. The non-banking financial company will operate with three business lines — retail finance, commercial finance and insurance solutions.
In the first eight months of this year, BMW sales in India rose by 43 per cent to reach a total of 3,301 units. “Having taken the lead in the premium segment for the first time last year, we aim to maintain our leading position this year with the market launch of the new 5 Series. We are also confident that we will be able to increase sales substantially over the coming years, added Schaaf.
