BMW Group Ventures Into India

BMW Group has strengthened its international market strategy by formally entering the Indian market. The wide range of activities planned for the country includes the building of an assembly plant for BMW vehicles in Chennai in southern India and establishing a sales subsidiary in Delhi. BMW Group will also expand its network of dealers to include all the key metropolitan centres.

The opening up of the Indian market is an important step in the company’s expansion plans in Asia. "The Indian automobile market offers significant growth potential in the long term. With our increased presence there, we will be well positioned to fully tap into this potential," says Helmut Panke, Chairman of the Board of Management of BMW AG. "This marks a further important step in our Asia strategy."

The company is targeting an annual sales volume of 150,000 units of BMW, MINI and Rolls-Royce vehicles in the Asian markets by 2008. In fiscal 2004, BMW Group sold 95,482 vehicles in Asia.

The production and sales subsidiary will be owned 100 per cent by BMW Group and will commence business operations at the beginning of 2007. Initial investments total 20 million euro. The plant will produce BMW 3 Series and 5 Series saloons with production intended solely for the local market. In addition to operating the assembly plant and importing BMW cars, the tasks of the sales subsidiary will also include developing the dealer network, deciding on pricing and product strategy as well as marketing and after sales. In the medium term, BMW Group will employ around 200 people in India with an additional 600 jobs created in the dealer and service network.

In 2004 the BMW Group delivered 122 BMW brand vehicles to the Indian market through a network of two intermediary dealers and three outlets. In the first half of 2005 deliveries totalled 100 vehicles. BMW Group sees high growth potential in the Indian market and is hopeful of multiplying its annual sales volume with its entry into the Indian market.

Including its planned assembly plant in India, the BMW Group will have a total of 23 production locations in 13 countries worldwide, while the new sales subsidiary will take its number of international sales subsidiaries to 35. A network of national importers is able to serve another 120 countries. This gives the BMW Group an unmatched international production and sales network in comparison with its competitors.

The BMW Group is present in almost all the strategic nodal points in Asia. It is already represented in Japan, Indonesia, Malaysia, South Korea, Thailand and the Philippines with its own sales subsidiaries. In China, the BMW Group has a production and sales joint venture for BMW vehicles. In addition, the company operates an assembly plant in Thailand, from which the upcoming AFTA (Asian Free Trade Area) markets are to be supplied in future. Further BMW assembly plants are located in Malaysia and Indonesia.

The Asian importer markets are managed from the Singapore-based regional office, BMW Asia. In addition, from 2006 a design studio will also be set up in Singapore. Malaysia forms the logistical node for the BMW Group in Asia, with an IT centre and a parts distribution centre.

Published 5 November 2005 Melanie Carter
 
 

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