MUNICH: German car-maker BMW is confident that its upcoming facility in India at Mahindra World City near Chennai will go on stream as scheduled in early 2007.

Peter Kronschnabl, the newly-appointed President of BMW India Pvt. Ltd. told The Hindu that civil work at the site had already commenced in January.

He expected BMW India, the fully-owned subsidiary of the German auto major to sell over 1,000 cars in the first year of its full operations. The upcoming facility would have a capacity to churn out 1,700 cars annually on a one-shift basis.

Klaus Berning, Senior Vice-President (Sales), Asia Pacific, Africa and East Europe, said BMW was in for a long-term engagement in India. "We do not have aggressive sales targets. We want Mr. Kronschnabl to develop the brand and look at quality,'' he added. He made it clear that BMW would prefer to wait for big volume to come from its India business. The company would follow in India the same practices it adopts elsewhere in the globe. "The premium segment, in which BMW operated in India, saw a sale of 3,000 units last year, said Mr. Kronschnabl. "This segment will have a steady growth,'' he added.

Mr. Kronschnabl was earlier the project manager of India operations. He led BMW's market development in Asia and Africa and was instrumental in setting up its operations in Poland and Hungary.

On deputation to India

The President said over 100 BMW personnel from Germany were now on deputation to India working on 32 sub-projects. The objective was to ensure quality standards and put in place training processes at the upcoming India facility.

Mr. Kronschnabl said the India venture would have a five-member board, comprising four expatriates and one Indian. To a question, he said recruitment of personnel for the plant would commence in May. He expected the facility to create 200 direct jobs and 400-600 indirect employment through its dealer network.

Mr. Kronschnabl said the Indian subsidiary would make BMW 3 and 5 series cars. Further, it would also bring in the 7 series and X3 and X5 vehicles into India as CBUs (completely built units).

Dealer network

BMW, he said, would enlarge its dealer network in India. The company would have more than ten dealers. According to him, BMW would have one dealer in each metro. He made it clear that the dealership would be a full-fledged one in tandem with those in the U.S. and Germany vis-a-vis service, sales and spares delivery. The company was planning a training programme for all those short-listed dealers in Munich later this month.

"When BMW starts in India, you can expect the same standards from our dealers as well,'' he said. In this context, he said, BMW would work with the dealers to draw up their business plans. He estimated an average investment of Euro 2 million by each dealer. He said BMW believed in brand separation and hence ruled out the possibility of a single dealer selling different brands (like BMW, Mini, Rolls Royce and the like) under a common roof. Asked about the viable capacity to produce cars of this category, he pointed to a figure of around 700-800. India is the second country after Thailand where BMW is setting up its own subsidiary.

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