BMW plans to build the 3 and 5 series at an assembly plant in Tamil Nadu, 25 miles (40km) from Chennai in South India.
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The vehicles will be imported in completely knocked down kit (CKD) form from Germany through Chennai Port and assembled at the 22-acre Maraimalai Nagar site in the Mahindra Industrial Park.
But BMW CFO Stefan Krause said: “We are still awaiting final (Indian government) approval for CKD production.”
The assembly plant would require an initial investment of around €20 million (INR1.06billion).
BMW did not reveal capacity but noted that the minimum volume for a viable plant would be around 1,000 cars a year. Such a facility would create 160 jobs directly and a further 320 indirectly.
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By GlobalDataThe company chose Chennai due to its proximity to the port.
Krause stressed that the cost advantage to buyers from CKD assembly would be significant. CKD imports attract 15% duty compared to 60% on completely built up (CBU) imports.
BMW would continue with CBU imports of other models after local assembly of the 3 and 5 lines starts.
In 2004, BMW sold just 122 fully imported cars in India.
Deepesh Rathore
