BMW plan on track - Road clear for one, sharp bend for others

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By OUR CORRESPONDENT in Delhi
  • Published 12.08.05
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New Delhi, Aug. 12: BMW today got a go-ahead from the Centre to set up a Rs 100-crore assembly unit at Chengelpet in Tamil Nadu.

The German company’s plans were among the 30 foreign direct investment (FDI) proposals cleared by the government today. The plans are worth Rs 181 crore.

The BMW plant will assemble knocked-down kits brought from Germany; some components will be sourced locally.

With plants of Ford Motors and Hyundai located in the same district, BMW hopes to tap the local component industries.

BMW will also import completely-built units from the German parent and its group companies, sources said. The Indian subsidiary will market and distribute the automobiles at home and abroad, besides providing after-sales services.

Sources said BMW AG and BMW Holdings BV will buy out the subsidiary ? BMW India Pvt Ltd ? set up in 1997. BMW AG will acquire a 30 per cent stake and BMW Holding will buy the rest.

BMW makes the 3-series saloon, the Mini and the 1-series compact, besides the Rolls Royce brand. Its move to set up a plant in India comes even as another German carmaker, Volkswagen, is caught in a controversy over misappropriation of funds.

In recent months, teams of top BMW officials have visited the sub-continent many times to examine the feasibility of setting up operations here.

A four-member team led by senior manager Wolfram Rehm was also here to assess the possibility of setting up shop in Kerala.

Other possible locations included Andhra Pradesh, Tamil Nadu and Karnataka.