BMW may build a car plant in India, a market it views as undeveloped, to help it hit an Asian sales target of 150,000 cars within three years, its chief executive told Reuters on Wednesday.
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The Munich-based automaker, battling DaimlerChrysler’s Mercedes-Benz to be the world’s top maker of premium cars, reportedly forecast group sales in Asia to grow 10-15% this year.
BMW, whose model lines also include the Mini and Rolls-Royce brands, sold 95,500 cars in Asia last year, around 8% of its total sales. It aims to raise that to 150,000 by 2008, BMW head Helmut Panke told Reuters.
Panke, speaking during a two-day trip to Singapore, reportedly said a BMW team of experts was in India to scout for possible locations for car production –only 122 imported BMW cars were sold in India last year from outlets in Bangalore, New Delhi and Bombay.
“There’s no decision yet and we have no specific time frame. Perhaps we’ll enter a joint venture similar to the one in China,” Panke told the news agency.
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By GlobalDataAccording to Reuters, he insisted that China, BMW’s second-biggest market in Asia by sales after Japan, would see above average long-term growth and dismissed last year’s 15% drop in mainland group sales as a one-off.
“We will grow in China (in 2005 from 2004),” he reportedly said, adding it was “not important if it’s 5 or 6 or 8%” sales growth.
Panke told Reuters January had not been a good month in China. BMW cut prices for the 3- and 5-series cars it makes locally in a joint venture with Brilliance China Automotive by up to 15% to lure buyers.
“I think we have in principle reached the bottom (in pricing),” Panke reportedly said, adding: “Perhaps (we will cut prices by) another 1 or 2%.”
Reuters noted that BMW, which also vies with Volkswagen‘s Audi to sell high-end sedans to an increasingly wealthy and style-conscious Asian middle class, only began assembling its sedans in China in 2003.
Asked about its new multi-purpose-vehicle, which BMW has dubbed the “space functional concept” and claims defies traditional description, Panke reportedly said details would be announced in the first half of this year.
He told Reuters the vehicle — neither minivan, estate nor off-roader — would go on sale in 30-36 months but added that no decision had yet been made on whether to make the new car in Germany or the United States.
Depending on the parts used, the car could be made at an existing German plant or in its US factory at Spartanburg, Panke reportedly said, adding foreign exchange would be a factor.
According to Reuters, BMW has hedged over half its foreign currency exposure for this year. The group’s exposure to a falling dollar – it sold nearly 300,000 vehicles in the United States last year – and rising prices for raw materials such as steel and oil-based components such as plastics has concerned investors and some analysts expect those factors to hit profits this year, the news agency added, noting also that BMW will give a 2005 profit outlook next month.
Reuters said that Panke acknowledged that selling just 792 Rolls-Royce limousines last year had been disappointing, but he maintained a sales target of 1,000 units for this year.
