Text & Photo: Bhargav TS
German luxury carmaker BMW has increased the level of localisation in its cars assembled at the Chennai plant by 50%. By increasing the local content the company intent to stay stronger in India by passing the cost advantage to its customers. To highlight the localisation strategy, BMW India invited Sachin Tendulkar to the Chennai plant, who marked the occasion in a unique way by assembling a BMW 520d using the parts manufactured by the Indian auto component suppliers.
Sachin Tendulkar
assembled a BMW 520d
using the parts made
locally
After working in the assembly line along with few other staff, Sachin Tendulkar said, “I am an avid BMW enthusiast and have been driving BMW cars since a very long time. But the experience of making a BMW with my own hands was unique and unforgettable. I am impressed by the high quality standards followed at BMW Plant Chennai that ensures the impeccable performance of a BMW. I got the opportunity to go through the tiniest details and efforts that are put into in making a BMW. Next time I take my BMW out, I can proudly say – I have made one.”
To achieve this level of localisation, BMW has tied up with 7 leading component manufacturers in India. The company sources engine and transmission from Force Motors, axles from ZF Hero Chassis, door panels and wiring harness from Draexlmaier India, exhaust systems from Tenneco Automotive India, heating, ventilating, air-conditioning and cooling (HVAC) modules from Valeo India and Mahle Behr and seats from Lear India.
Philipp von Sahr, President, BMW Group India said, “The company was focussed on building strong foundation between 2007-2009 and the next 2 years, the focus was on achieving leadership. From 2013 onwards, the vision was on having a sustainable growth and long term profitability. The company has invested Rs 4.9 billion in India. The group has always looked towards India with a long-term perspective and our strategy is based on an inclusive approach. We have continued to build our operations in India in a systematic way. With a strong portfolio of locally produced cars, the time was appropriate to partner with major Indian auto component suppliers. This decision benefits BMW in terms of cost optimisation and value addition while at the same time it creates business and profitability for our suppliers – a win-win situation.”
Engines and transmissions
are assembled by
Force Motors
Robert Frittrang, Managing Director, BMW Plant Chennai said, “BMW Plant in Chennai takes a matter of pride, it produces equal quality BMW cars as any of the BMW facilities and assembly plants do globally. It is all possible because of the infusion of essential elements like high skilled employees, advanced techniques and state-of-the-art machinery in this facility. The cars locally produced at BMW Plant Chennai now feature very strong local content. We are confident that through our partnership with Indian auto component suppliers, we will set even higher benchmarks in quality standards and supply chain management.”
Frittrang futher said, “Currently we have increased our localisation level up to 50% from 22% to have cost optimisation and value addition to our products. By importing the car we were paying around 120% tax and by making partially here it has reduced to 60%. If the market is growing we will be increasing the local content further. We don’t want to urge and collapse the entire system, by doing it slowly, I think we can achieve our targets.”
As far as India is concerned, BMW Group has increased its investment in India to Rs 4.9 billion from Rs 3.9 billion. Sahr said the company will continue to invest over the years. Moving on to the key aspect of BMW’s growth sustenance, i.e. a product onslaught – BMW will expand its range and explore all possibilities for luxury cars in India. This goal will be aided by the M, X, and I brands, that will also steer the company’s presence in India. Other than that, BMW will bring in 15 new products including the X6, X5M, and the new BMW 1 Series.
According to Frittrang, in the 15 new products majority are new models and to highlight we are in the process of launching M models X5M, X6M, M4 and I models. Also we are in the phase of launching hybrid cars. There are quite fascinating and performance cars lined-up in the list to obsess customers with the right deliveries, adds Frittrang.
BMW Plant Chennai started operations on 29 March 2007. Since then, the BMW Group has strengthened its commitment to the Indian market and has continuously increased the number of its locally produced car models. Upto eight car models can be locally produced on two assembly lines at BMW Plant Chennai. Presently, the BMW 1 Series, the BMW 3 Series, the BMW 3 Series Gran Turismo, the BMW 5 Series, the BMW 7 Series, the BMW X1, the BMW X3 and the BMW X5 are locally produced at BMW Plant Chennai.
