The Bavarians reported that their overall Indian investment has risen up from INR 390 crore to INR 490 crore. A majority of this chunk of money has been directed towards BMW’s Chennai plant and their training programmes. According to the carmaker, almost 95% of their cars that ply on Indian roads are now made at their Chennai facility, which shifts 14,000 units each year. This has led them to increase the localisation of parts by 50% and hence the INR 100 crore bump in investment. This investment will eventually cut down the customer-end price of the company’s cars, thus leading to increased profits.
The Chennai plant is currently responsible for the production of the 1-Series, 3-Series, 3-Series Gran Turismo, 5-Series, 7-Series, X1, X3 and X5, put together across two separate assembly lines. Philipp Von Sahr, BMW Group India President said, “The higher localisation has enabled us to address challenges like inflation in emerging markets such as India.” Some of the investment also makes itself seen in BMW’s current training programme for its would-be employee force. The company’s Gurgaon training facility can train up to 18,000 trainees, who range from mechanics to service personnel and the folks in sales department. Adding to his earlier comment, Von Sahr said, “A certain amount of money has been spent in increasing automation levels too.”
The BMW X3 is also made in the Chennai plant, along with its X5 sibling.
BMW India sold 6400 cars last year and over the coming year, aim to launch 15 new models. The Bavarians hope to expand in tier-2 markets, plus increase their dealership network to 50 within the year. For luxury carmakers such as BMW, localisation to the maximum extent possible will be the key to their success in a cost-conscious market such as India. Seems like the Bavarians are getting there with their latest investment into achieving this very goal.
via ET & The New Indian Express