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Old 11th May 2011, 04:22   #1
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Default No price hike - BMW

http://http://post.jagran.com/ckd-no...bmw-1305034501
Quote:
BMW PLAYS IT SMART. NO PRICE HIKE.

BMW India today said it has started assembling engines of 3 and 5 Series sedans and sports utility vehicle X1 at its Chennai plant from April to avoid the higher 30 per cent customs duty, following the new norms on completely knocked down units in the Budget.

“At this point of time, our completely knocked down (CKD) operations are fully fulfilling the new regulations. We are paying 10 per cent duty… There will be no price hike,”

BMW India President Andreas Schaaf

For pre-assembled engines, transmissions and gearboxes, customs duty was fixed at 30 per cent in the 2011-12 Budget as against 10 per cent earlier. However, other parts continue to attract a customs duty of 10 per cent.

“In our engines, about 50 per cent of the assembly is done in India. So it is considered as locally produced,” he said, adding, the company will gradually shift to complete manufacturing of vehicles once it reaches a sizeable volume.

The company currently assembles 3 and 5 Series cars and the SUV X1. The ex-showroom prices of 3 and 5 Series cars in Delhi starts at Rs 24.4 lakh and Rs 37.6 lakh, respectively, while the X1′s price begins at Rs 22.4 lakh.
Assembling engines, not so difficult after all eh? Guessing others will follow suit.

Last edited by fre2bpowerless : 11th May 2011 at 04:36. Reason: writing more stuffs
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Old 11th May 2011, 07:33   #2
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Default Re: No price hike - BMW

But they have already hiked the prices by 60-80k last month(According to sales person, BMW Gurgaon). Sales even after the marginal hike are very strong, 520d being the most sought after variant.
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Old 11th May 2011, 08:10   #3
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Default Re: No price hike - BMW

60-80 k price hike is rather reasonable for BMW kind of pricing. This news should force other CKD assemblers to start assembling engines and/or gearboxes so that they remain competitive to BMW.

On the other hand I have been told that Tatas were earlier planning to price 150 PS model of
Freelander-2 at 29 lacs which now they have priced at over 34 lacs which is a very steep hike or is it a case of Tatas getting too greedy?

http://www.team-bhp.com/forum/indian...t-india-2.html (Jaguar Land Rover - New Model Blitz aims for top slot in India)

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Old 11th May 2011, 12:03   #4
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Default Re: No price hike - BMW

"For pre-assembled engines, transmissions and gearboxes, customs duty was fixed at 30 per cent in the 2011-12 Budget as against 10 per cent earlier. However, other parts continue to attract a customs duty of 10 per cent."

As per above para, 30% duty will be applicable only on imported pre-assembled engines, gearboxes and transmissions. Other CKD parts can still be imported on 10% duty. I don't think that the import price of these items will be more than 3-4 lac rupees and so the resultant additional 20% duty should be about 60-80,000.

This amount can be doubled due to additional burden of excise duty, VAT and margins etc.

Prafull Patel has made a appeal to the Govt., to withdraw this tax and provide a 2 year window to CKD assemblers to make necessary arrangements.
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Old 11th May 2011, 12:12   #5
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Default Re: No price hike - BMW

It could be possible that without going for proper engine assembly facility, BMW has started importing engines with just a few parts missing (why not just the plugs ? ) to circumvent the new rules.
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Old 11th May 2011, 20:01   #6
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Default Re: No price hike - BMW

Quote:
“At this point of time, our completely knocked down (CKD) operations are fully fulfilling the new regulations. We are paying 10 per cent duty… There will be no price hike,”
BMW's aggression in the Indian domain is remarkable. While Audi threatened to pull back further investments, Mercedes started wailing & a certain Mr. Patel requested a 2 year compliance window....BMW silently went ahead and met the eligibility criteria for the 10% duty.

Is it any wonder why BMW has become the No.1 luxury car marque in India? Despite a 10 year handicap to Mercedes! The speed with which it reacts, and attacks, is stupendously good.
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Old 11th May 2011, 22:49   #7
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Default Re: No price hike - BMW

In an article, in newspaper, I read that Mercedes has already updated that they had started assembling engines for CKD models (except for S class) ( before BMWs announcement). So far no news of price increase from Mercedes either for for its models- C, E, or S Class- but S class prices are likely to increase by 8Lakhs due to 30% taxes on assembled engines , transmission etc.
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Old 11th May 2011, 23:24   #8
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Default Re: No price hike - BMW

If BMW has started assembling engines in India, then it is exactly what the govt was hoping to achieve with the new CKD rules. The govt deserves a pat on the back for this.
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Old 12th May 2011, 00:02   #9
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Default Re: No price hike - BMW

If you recollect on 19th April 2011, I gave you an assurance that BMW India will not really hike the prices, you can check my post here :

Click here for my post (Help Needed: Luxury Cars under Rs.45L)


As far as I know few lots were shipped under the 30% duty and then they figured certain parts could be assembled here so thats how they later managed to get semi kits of the engines and transmissions, and believe me they are so serious about India they were even willing to take in all costs if that was their last resort.

There is a reason why BMW India in 3 years has come so ahead, Not only come ahead but taken die hard Mercedes-Benz fans like me into their web and believe me we refuse to go back to the nightmares Mercedes-Benz India creates, it's a combination of perfect products at the right price + Perfect Management + Perfect marketing + close to the best dealers in the business.

The road is open for BMW India and they will continue leading unless someone else gets even more aggressive or their product line up gets a little old which will not happen as by mid 2012 they will have one of the youngest lineup of luxury cars in India 3 / 5 / 6 / X3 / X1, Most if you notice are below the 50L price range where the volumes are, Mercedes will have the S-Class but that isn't the best volume puller.

Regards,
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Old 24th May 2011, 00:44   #10
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Default Re: No price hike - BMW

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Originally Posted by S350L-E240 View Post
If you recollect on 19th April 2011, I gave you an assurance that BMW India will not really hike the prices, you can check my post here :

Click here for my post (Help Needed: Luxury Cars under Rs.45L)


As far as I know few lots were shipped under the 30% duty and then they figured certain parts could be assembled here so thats how they later managed to get semi kits of the engines and transmissions, and believe me they are so serious about India they were even willing to take in all costs if that was their last resort.

There is a reason why BMW India in 3 years has come so ahead, Not only come ahead but taken die hard Mercedes-Benz fans like me into their web and believe me we refuse to go back to the nightmares Mercedes-Benz India creates, it's a combination of perfect products at the right price + Perfect Management + Perfect marketing + close to the best dealers in the business.

The road is open for BMW India and they will continue leading unless someone else gets even more aggressive or their product line up gets a little old which will not happen as by mid 2012 they will have one of the youngest lineup of luxury cars in India 3 / 5 / 6 / X3 / X1, Most if you notice are below the 50L price range where the volumes are, Mercedes will have the S-Class but that isn't the best volume puller.

Regards,
Indeed! .. That is my thread, and as you said they wouldn't hike the prices and they decide not to. BMW India is really killing it out there, they are surely in for capitalizing the Indian market and at this pace they will surely do so, they're already on their way
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