BMW decides to outsource its ancillaries from India

In yet another instance reflecting India’s emergence as a major sourcing hub for automobile components, German auto major BMW today announced that it will set up an International Purchasing Office (IPO) in Delhi by August.

The office will cater to its worldwide ancillaries requirement for its production capacities across 23 manufacturing sites and will be headed by an expatriat. “The purchasing office will be directly reporting to our global head-quarters in Munich though there will be co-operation between us,” said BMW India president Peter Kronschnabl.

BMW currently has a purchase unit for its manufacturing unit in Chennai and the two offices may approach vendors together. Currently, BMW sources some IT components from India but the new office will see a drastic increase in the volume and value of sourcing. Kronschnabl however did not divulge the quantum of sourcing expected to be generated from India.

“Once the sourcing team comes to India, they will study what kind of components to be sourced from here,” he said. With the office here BMW joins the list of global manufacturers like Renault, Volkawagen and Daimler Chrysler. DC has been sourcing components out of India for its global operations in Japan, US and Germany and its quantum of sourcing has been increasing by 20 per cent year on year.

BMW India has also lined up the launch of a slurry of models this year starting with the 5 series next month followed by SUVs X3 and X5, homologation tests for which is on.

Followed by the inauguration of its plant in Chennai, the company has had a good run in the industry with sales well in excess of its targets.

“Initially, we had planned to sell about 1,000 cars in India in the twelve months from the inauguration but now we have scaled it up to 1,200 units for this calendar year,” Kronschnabl said.

In April, BMW sold 107 units of cars, of which 76 units were ‘3 Series’ and the rest from its imported models such as the ‘7 Series’ and SUVs. He said the company expected to sell 300 units by end of this month to surpass last year’s sales of 257 units.

BMW has also been expanding its sales network and by the end of this year, it will have 12 dealers across the country. It will have one dealer each in Kolkata, Ahmedabad and Kochi and a second one in Delhi.