The Telegraph
Since 1st March, 1999
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BMW on test-drive for the Passage to India

Calcutta, July 16: German auto major Bayerische Motoren Werke — the fabled BMW — is gearing up for a manufacturing joint venture in India, the fourth-largest automobile market in Asia.

BMW senior vice-president Lueder Paysen said in Singapore that the company has opened talks with Indian firms for a possible venture.

Paysen refused to disclose the name of the prospective partner beyond saying that a decision will be taken in six months.

Industry sources say BMW has sounded Munjals of the Hero group for a 50:50 venture. “The Munjals are interested in entering the passenger car market with BMW following their huge success in bikes with the Honda group of Japan. This, however, could not be confirmed since the Munjals were unavailable for comment, despite several attempts.

Sources said the Indian venture would initially have assembly lines, where the premium five-series models would be pieced together. The cars are likely to be available in petrol and diesel versions.

Later, BMW will pour in more money to set up a full-fledged manufacturing unit that will roll out vehicles with a local content of around 64 per cent. Having conducted a preliminary market survey in India, it could also assemble the Rover ‘Discovery’ jeeps — the four-wheel drive sports utility vehicles.

The $ 42-billion auto major has identified Asia as a growth area. It expects to sell 1.5 lakh cars there by 2007, a near two-fold increase over 78,500 sold in 2002. BMW currently sells its popular '3, 5 and 7 series' luxury cars, channelled through importers in Delhi and Mumbai.

“We are looking at the possibility of setting up a plant. We hope the feasibility study proceeds well and that the results are in line with our expectations. All will depend on the study,” a BMW spokesperson said on the phone from Dubai.

BMW, which sold about 4,54,970 units world wide in the first half of the current financial year, sees China as the market with the largest potential. It sold 9140 cars there, up from 6660 a year ago. The company has a manufacturing plant in Thailand. Another one, to be built by a joint venture, will be up and running in China later this year.

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