• Production and sales subsidiary set to open in 2007
• Initial investment 20 million euros

In the pursuit of its international market strategy, the BMW Group has announced its intention to formally enter the Indian market.

The BMW Group intends to establish a production and sales subsidiary.

Joining the Delhi area-based sales subsidiary, BMW will build an assembly plant for BMW automobiles in Chennai in southern India, and expand its dealership network to all metropolitan centres of the country.

The opening up of the Indian market is an important step in the company's expansion plans in Asia.

“The Indian automobile market offers significant growth potential in the long term. With our increased presence there, we will be well positioned to fully tap into this potential,” says Helmut Panke, Chairman of the Board of Management of BMW AG.

“This marks a further important step in our Asia strategy.”

The company is targeting annual sales in the Asian region of 150,000 units of BMW, MINI and Rolls-Royce cars by 2008. In fiscal 2004, the company sold 95,482 automobiles in Asia.

BMW Group will own 100 percent of the Indian production and sales subsidiary. Business operations will start at the beginning of 2007, with an initial investment of 20 million euros.

The plant will produce BMW 3 Series and 5 Series saloons, with production intended solely for the local market.

In addition to operating the assembly plant and importing BMW cars, the subsidiary will also develop a dealer organisation, set pricing and product strategy, as well as control marketing and after sales.

In the medium term, the company will employ around 200 people in India. Up to 600 additional jobs will be created in the dealer and service network.

Currently, two intermediary dealers with three outlets represent the BMW Group in the Indian market. In 2004 financial year, the company delivered 122 BMW brand vehicles through this network. In the first half of 2005, deliveries totalled 100 automobiles.

BMW Group believes that by establishing a directly owned production and sales organisation it will achieve substantial growth in the Indian market.

When the Indian assembly plant is established, the BMW Group will have a total of 23 production locations in 13 countries worldwide, while the new sales subsidiary will take its number of international sales subsidiaries to 35. A network of national importers is able to serve another 120 countries.

The BMW Group is present in almost all the strategic points in Asia. It is already represented in Japan, Indonesia, Malaysia, South Korea, Thailand and the Philippines with its own sales subsidiaries. In China, the Group has a production and sales joint venture for BMW automobiles. In addition, the company operates an assembly plant in Thailand, from which the upcoming AFTA markets are to be supplied in the future. Further BMW assembly plants are located in Malaysia and Indonesia.

The Asian importer markets are managed from the Singapore-based regional office, BMW Asia. In addition, from 2006 a design studio will also be set up in Singapore. Malaysia forms the logistical node for the BMW Group in Asia, with an IT centre and a parts distribution centre.

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