Hopes to sell 50-100 SUVs, priced at Rs 66-83 lakh

German carmaker BMW showed confidence in the Indian luxury car market by taking the wraps off the X6 on Thursday.

The sports utility vehicle, imported as completely built units (CBUs), come in two variants — the xDrive50i, with a sticker price of Rs 82.90 lakh and the xDrive30d, costing Rs 65.9 lakh.

Peter Kronschnabl, president, BMW India, said the luxury car segment, being niche, hasn't been as badly affected as mass products. "We are confident of maintaining our number one position in the luxury segment by bringing in newer and better cars. We sold 2,908 cars in India in 2008 compared with 1,387 in 2007," he said. BMW sold 250 X5s and 90 X3s last year. It is aiming at selling 50-100 X6s by next year. In January, the automaker sold 270 cars and expects sales to touch 200 in February.

In March 2007, BMW opened its Chennai plant, where it produces the 3 and 5 series sedans, both petrol and diesel variants. The unit has the capacity to produce 3,000 cars per year on a single-shift basis. "80% of the BMWs sold in India are assembled at the Chennai facility. The extent of localisation is only 10%. Right now only seats, seat covers and door panels are locally produced and all parts including the engines and the body are imported," Kronschnabl said. He added that currently BMW is not looking at assembling or producing units at the Chennai plant for exports.

Kronschnabl said that the luxury segment in India is artificially small as it doesn't have too many brands. Besides, after-sales service isn't available in the country for luxury brands. This is the area BMW wants to focus on.

Within BRIC economies, BMW sold 60,000 cars in China, 18,000 in Russia and 3,000 in Brazil. "India is an important market for us and to further strengthen our reach we are entering phase II expansion by taking our dealerships to Ludhiana, Bhubaneshwar, Jaipur and Coimbatore by year-end. With this our dealership would reach a total of 16 from 12 currently," he said.

Kronschnabl said the fact that the government of India plans to invest $450 billion in infrastructure and modernisation of road networks gives the company big hopes. BMW's initial investment in India has been Rs 110 crore. There are no investments planned for this year.

Meanwhile, BMW India has established an international purchasing office (IPO) at Gurgaon. It will focus on developing India as an exports hub for BMW group's international production network and work towards increasing the sourcing of parts from the country over a period of time. "We will source castings, forgings, engineering services from India," Kronschnabl said.

Neha Rishi/ DNA-Daily News & Analysis Source: 3D Syndication