BMW sells 1,350 units, to enter Tier II cities next year

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New Delhi, Dec 6 (UNI) Riding high with a 30 per cent market share in the country's luxury car segment, German car maker BMW today said it will enter the tier II cities by the end of next year, besides increasing the number of dealerships to 12 by May 2008.

''The Indian luxury car market has a great potential and looking at this, we will enter the tier II cities by December 2008,'' BMW India President Peter Kronschnabl told reporters here on the sidelines of the launch of BMW's eight dealership outlet here which is largest one spread over 45,000 square feet.

He said the outlets to be opened in the tier II cities will be more or less of the same size as they are in the metros.

However, Mr Kronschnabl refused to divulge further details about its plans of tier II cities.

Among the tier II cities, Surat and Coimbatore are expected to be on the company's radar.

At present, BMW has eight dealers, two each in the NCR including this newly launched dealership and Mumbai, and one each in Chandigarh, Bangalore, Hyderabad and Chennai.

The President said the next dealership will open in Pune on December 19, followed by Kochi and Ahmedabad in March next year.

The twelfth outlet will be in Kolkata by May 2008.

Mr Kronschnabl said the company expects to sell 1,350 units by the calender year-end.

The luxury car segment in the country is growing by 40 per cent and is expected to touch 4,500 units by the year-end, which would rise to 10,000 units by 2010, he said.

Mr Kronschnabl said the company is yet to achieve the peak in sales, as the luxury car segment will further grow with the availability of multiple choices.

''The luxury market was artificially low, as there was non-availability of choice before the customers,'' he said.

Headquartered in Gurgaon, BMW India, a wholly-owned subsidiary of the BMW Group, has initially invested Rs 110 crore into the establishment of its manufacturing plant in Chennai, which became operational in March this year, and development of a dealer organisation across all metropolitan cities in India.

The Chennai plant produces the BMW 3 Series and BMW 5 Series Sedans in petrol and diesel variants. It has a capacity of 1,700 units per year on a one-shift basis.

On increasing the plant's capacity, the President said, ''It is up to the domestic demand which determines the production.'' Reiterating its commitment of making India as a major hub of components sourcing, the President said ,''India has potential for becoming a global sourcing hub. But it is too early to say how big the size will be.'' The company recently set up its International Purchase Office (IPO) in Gurgaon, the fourth one in Asia, to scruitise the potential suppliers for components sourcing from India. The other three are in Japan, Singapore and China.

The company is all set to launch its much-awaited M3 car at a price of about 74 lakh during the coming Auto Expo in January next year here.

Commenting on the MINI brand, he said the company is evaluating the market, and expected to release the market evaluation early next year. ''Only then we will decide future course of actions,'' he added.

With the assembly plant in Chennai, the BMW Group has a total of 23 production locations across 13 countries.

UNI

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