Rumour: BMW to drop prices thanks to increased localisation

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BMW is reducing prices on many of its models in India. The step is being taken as the levels of localisation have increased.

According to the information we have received, the X5 SUV will see the biggest price reduction - about Rs. 4 lakh. Among other cars, the 530d sedan will see its price fall by Rs. 2 lakh (approximately) and the X3 SUV and 3-Series should see their prices cut by Rs. 1 lakh or so. BMW is likely to make an official announcement about these price cuts in a few days.

Earlier this year, BMW had announced that it had started sourcing different components for local production of its cars at the Chennai plant from various Indian manufacturers. The level of localisation at its Chennai plant has been increased to approximately 50%. The company has also increased its cumulative investment in India from Rs. 390 crore to Rs. 490 crore. Most of this investment has been route to the Chennai plant.

The company claims that 95% of BMW cars on Indian roads are built at its Chennai plant, which has a capacity to produce 14,000 units. The facility has two assembly lines and locally assembles models such as the 1-Series, 3-Series, 3-Series Gran Turismo, 5-Series, 7-Series, X1, X3 and X5.