Schaaf: Aiming big

Udaipur (Rajasthan), March 27: German premium car maker BMW is set to launch its crossover sports utility vehicle X3 in India later this year and will invest Rs 180 crore by 2012 to expand production.

“BMW is committed to India. The group sees huge potential in the market and plans to expand its product range this year,” said Andreas Schaaf, president of BMW India.

BMW will launch the X3, a crossover between an SUV and a sedan, by June. Last week, it launched the luxury 6 series convertible in India, priced at Rs 95 lakh (ex-showroom).

“The X3 to be launched in India will be assembled from completely knocked down (CKD) kits at the Chennai plant,” said Schaaf. At present, the plant assembles BMW 3 series and 5 series sedans as well as the X1 models.

The X3 will compete with the Audi Q5, which, too, is assembled in India, said analysts.

Industry sources said despite the hike in the import duty of CKD vehicles, the X3 would be priced at around Rs 40 lakh. The government has changed the definition of CKD units, which now attract an import duty of 30 per cent.

BMW, which has already invested Rs 110 crore till September 2010, plans to invest another Rs 70 crore by 2012 to expand its Chennai facility and increase its dealership network.

“We have increased Chennai production capacity to 10,000 (per year) from 8,000 and plan to augment it further, according to market demands,” said Schaaf.

The company has recently acquired additional land to enhance the size of its facility in Chennai to 40 acres, up from 22 acres earlier.

Dealer expansion

BMW is set to double its dealerships to 40 by 2012 from 20 at present. It will expand its network in new cities such as Aurangabad and Kolhapur where the company sees potential of selling at least 50 vehicles in a year.

“In the next 10 years, India’s premium car market is expected to grow 10 times to up to 1.5 lakh units … we will certainly enjoy 35 to 40 per cent of the market by then,” said Schaaf.

Indian consumers had bought around 16,000 luxury cars made mainly by BMW, Audi and Mercedes last year. The demand is likely to go up by up to 40 per cent this year, according to analysts.

BMW India sold 6,246 units in 2010 to retain its top position in the sector. Mercedes-Benz and Audi sold 5,819 cars and 3,003 cars, respectively.

In December, BMW launched its globally popular sports utility vehicle X1 in the petrol and diesel variants.