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BMW To Increase Local Sourcing

Chennai : In a bid to increase its efficiency and economies of scale, BMW announced that it will now raise local sourcing to 50%, from the current 20%, BMW India President Philip Von Sahr announced.

An imminent reason being price reduction given that half of the 2,800 parts will now be produced locally, Sahr emphasised that “it shows our seriousness about this market.” Some of the major components sourced for local production are engine and transmission from Force Motors; axles from ZF Hero Chassis; door panels and wiring harness from Draexlmaier India; and heating and ventilating, air-conditioning and cooling modules from Valeo India. Having flown down national ambassador Sachin Tendulkar to its Chennai plant, the cricket maestro assembled a BMW 5-series car using parts from Indian auto-component suppliers. Sahr is optimistic that the local sourcing will increase further in the future, albeit refrained from stating a clear period. 

Since investing Rs. 490 crore from the time BMW started operations from 2007, 8 models have been assembled at its two assembly lines.

"We are not bothered about sales, but running a profitable business. We have been profitable for many years now. In 2015, we will expand our product range and cover all the opportunity available in the luxury car segment. This year we will launch 15 new products along with i8 launched in January. Also in the new launch list are the X6, X5. We will also launch 1 Series, 3 Series" Sahr added.


Plant managing director Robert Frittrang was quoted as follows on the employee strength in the Chennai plant :  "We have about 560 people. Actually BMW cars in Chennai plant are made in India and made by Indians."

Clearly BMW's strategy seems to be more poised towards being profitable in the business rather than just targeting an increase in the market share. BMW India president Philipp von Sahr is optimistic about the prospects of BMW in 2015 as they would be expanding their product range with an aim to cover all the opportunities in the luxury car segment.by launching 15 products. Surely the year of 2015 is one to watch out for, as far as BMW is considered.

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