BMW zooms into Tamil Nadu, opens plant

Chennai, Mar 29: German luxury car maker BMW today inaugurated its assembly plant set up at an investment of 20 million euros eyeing a sales of 1,200 vehicles in the first year of operations.

Speaking after the inaugural function of the the 89,000 sq metre plant in the Mahindra City, BMW Board of Management Chairman Norbert Reithofer said the Chennai plant marked the second important step in the company's plans to tap India's emerging growth after commencing operations in Delhi at the beginning of this year.

Stating India offered huge opportunities for growth in the premium car segment, he said the Chennai plant underpinned BMW's long-term commitment for profitable growth.

''In India, we will have local production for a significant proportion of sales with BMW vehicles in the 3 series and 5 series.

To be built in Chennai, the series are destined exclusively for Indian market and will be uniformly priced at Rs 27.5 lakh and Rs 37 lakh respectively.'' Other models like BMW 7 series, X5 or X3 would be imported to provide Indian customers with a large variety of attractive BMW vehicles.

On picking Chennai for the project, Dr Reithofer said it was the ideal choice as it provided the best possible conditions for meeting a wide range of criteria. ''One positive aspect is the presence of other automobile manufacturers, including an appropriate supplier industry. The other advantage is the outstanding pool of qualified labour available in Chennai,'' the BMW official said.

He said BMW sold about 1.36 lakh vehicles under its three brands-- BMW, Mini and Rolls Royce in Asia.

''We are determined to raise the retail volume to 1.50 lakh units in Asia by 2008 and in the long term, establish the continent as the fourth mainstay of our global business, complementing Germany, Western Europe and North America,'' he added.

Observing India had a great growth potential for the future, Dr Reithofer said experts predicted an increase for the total car market in India from 1.2 million vehicles today to 2.2 million vehicles in 2015.

''And for the premium segments where the BMW operates, the experts expect the market volume to double during the same period.With a view to benefitting from this growth and make an active contribution to this growth, BMW decided to set up its production location in Chennai, which is the perfect location for the plant,'' he said.

The plant would employ about 200 people and hoped to create an employment potential of 600 through dealership and service network.

Mr Frank-Peter Arndt, Member of the Board of Management, said the scope of work at Chennai Plant included pre-assembly as well as assembly and finish.

''At full capacity, Chennai plant can produce 1,700 units a year in one-shift operation.'' Replying to questions, Mr Frank and Dr Reithofer said BMW already had bookings for about 200 cars and expected a total sale of 1,200 vehicles this year with a model mix of 50:50.

''In the next five years, the sales are expected to touch 7,000 vehicles in both the 3 series and 5 series,'' they added.

Ruling out export of cars produced from Chennai, he said 90 per cent of the total sales would be from Chennai plant and the remaining from imported cars.

UNI