BMW mulls Indian suppliers for local production image

BMW Group, the world’s leading luxury automaker, announced its Indian division has plans to establish partnerships with seven local parts suppliers to acquire components for domestic production of cars at the company’s Chennai factory in southern India.

According to the automaker, the Chennai assembly facility currently builds the 1 series, 3 series and 5 series passenger cars, as well as the X1, X3 and X5 sport utility vehicles. The partners, such as Force Motors Ltd., Tenneco Automotive India and Lear India, will improve the company’s Chennai plant localization level to around 50 percent, commented BMW Group India in a recent statement. Pune-based Force Motors, for example, should provide BMW with engines and gearboxes, while the company added it would also use the new local partners for axles, door panels, wiring harness, exhaust systems, air conditioning and cooling modules and seats.

Establishing additional local partnerships with domestic suppliers is always a cost saving measure, and it also yields a high level of credibility to the parts makers – since BMW’s high production standards need to be met fully before the partnership begins. The company said local costs will be optimized and they bring higher quality standards, a measure of justification for the automaker’s January decision to lift prices across the line-up by up to five percent. The group added that total Indian sales in 2014 fell 12 percent from the figures of 2013, with a tally of 6,812 BMW and Mini autos.

Via Automotive News Europe