Sachin Tendulkar, former cricketer and BMW Group India’s brand ambassador, at the firm’s 11-year celebration
The Indian arm of German automobile
major BMW says it would like to localise more, from the current 50 per cent; however, official policies such as on customs duty and others are a deterrent.
The company is expecting double-digit growth in the March quarter, said Vikram Pawah, president, BMW Group India, while launching a skill development initiative in the country. He was speaking at the company's factory in Mahindra World City here, during the 11th year celebration of the facility.
The company has started production of a sports utility vehicle (SUV), the BMW X3, from the facility, expected to be launched in a few weeks. It would also start manufacturing the Mini Countryman for the local market this year.
“We are producing 50 per cent of the parts locally, including engines. It has gone up from almost nil 11 years ago. For every part, you need a minimum volume to set up the machinery or invest in. When we talk to the government, we always say the increase in duty on CKD or parts are a problem. It is going to go against the Make in India. It doesn't allow the volume to increase first and then localise. We are already 50 per cent localised, we want to localise more but we have been disadvantaged for that to some extent,” he said.
On Thursday, the firm launched Skill Next, a technical skilling initiative under which it would offer 365 BMW engine and transmission units to educational institutions across the country.
BMW India is planning to increase prices by 3-5.5 per cent. The price hike comes after a year, and after the Customs duty increase on completely-knocked-down units by the government. The hike will be implemented from April 1. The company had earlier expressed its displeasure on the customs duty hike, alleging that this could impact growth of manufacturing in India.