BMW may assemble Mini locally to reduce prices

[DukeNukem]

The iconic Mini Cooper might just become more reasonably priced. Unconfirmed reports suggest that BMW, its parent company, is planning to assemble a part of the Mini range in India, in order to reduce costs levied via import duties.

Currently the cars are being imported as CBU (Completely Built Units) which attracts over a 100% duty. In effect, that doubles the price of the car.

The list below displays the current prices of the Mini range.

Mini Cooper: Rs. 25,50,000
Mini Cooper S: Rs. 28,60,000
Mini Cooper Convertible: Rs. 30,70,000
Mini Cooper S Countryman: Rs. 32,80,000
Mini Cooper S Countryman High: Rs. 35,90,000
All prices are ex-showroom, Mumbai

Local assembly

The plan is to import CKD (Completely Knock-Down) units and assemble them in India. The import duty is then drastically reduced to 30% only. Roughly calculated, that would bring down the price of the entry-level Mini Cooper Hatch from Rs 25.5 lakh to about Rs. 16 lakh.

There isn't a doubt that the move would lead to noticeably higher numbers for Mini (and thus, BMW). Amongst German car manufacturers, the No. 1 Title holds bragging rights and BMW has been known to cut prices, offer discounts and launch stripped down variants...all for volumes. For the first time ever last month (June 2012), Audi lead BMW in monthly sales albeit marginally. BMW sales have declined by 12% to 2,088 units in Q1 from 2,377 units in the same period last year.

BMW will use its existing manufacturing plant at Chennai to locally assemble the Mini range. The plant already assembles the X1, 3-Series and 5-Series. This report also comes days after BMW announced an investment of USD 388 million in Mini over the next few years to increase capacity at its British manufacturing plants.

Related thread

MINI Cooper Review (Mini Cooper S and Mini Convertible : Driven)

[dZired]

Wow!!! Thats a wonderful piece of news. Can I please know the source of this information.

If this is true and if the mini costs around 16lacs in the near future, then I am definitely going to drop the idea of a fortuner and am going for the mini.

[avneeshj]

They could import it CKD and not transfer the full benefit to the customer. Even if they do will Indians spend 16 lacs on what is essentially a 2 seater hatch? I guess we have to wait and watch.

[Parthasarathig]

As pointed out by moderator Suhaas, BMW even after importing CKD kits will hardly bring down the price. 16lakhs is a highly doubtful price as BMW would want to maintain its perceived premiumness in India.

And 16 lakhs for a petrol car? With the rising price of petrol i think only people with higher disposable income will be able to afford the mini. Thus hardly any volume benefits for BMW.

P.s do they have a diesel engine variant? :

[GTO]

Originally Posted by dZired

Can I please know the source of this information

Inside sources

Originally Posted by Parthasarathig

16lakhs is a highly doubtful price as BMW would want to maintain its perceived premiumness in India.

The tiny Mini, even at 16 lakhs, is as premium as premium can be. Remember, BMW wants volumes. Else they wouldn't be selling X1s for 23 lakhs or the stripped-down 320D that can be embarrassed by an i20 in equipment.

P.s do they have a diesel engine variant? :

Internationally yes. They also have a manual transmission!

[shankar.balan]

Good show. This is certainly a step in the right direction.
The Mini Cooper will certainly be appreciated more if more people can access it.
But it can never be one's "only" vehicle. Invariably it will end up being the second or even third vehicle for the more affluent families. Else it will be the "rich kid's" vehicle of choice! Much like the way the Gypsy was the "rich kid's" vehicle of choice 20-22 odd years ago!
Sad, but what was once envisaged as a vehicle for the commoner is no longer true of it.
Same goes for the Fiat 500, VW Beetle etc.
And if I am right we are talking ex showroom price for the base level Mini being 16 lacs after local assembly. Including Taxes, Insurance etc in Bangalore, this will be more or less the same price as a Skoda Yeti give or take! Expensive.

While BMW may want to retain their premium image and all that jazz, lets remember that the base level Mini ONE is priced around 10-12K GBP in the UK which translates to about 9 lacs or so give or take!

What really gets my goat is that we are being made to pay a significantly higher amount for the same vehicle as we would pay if we were not in India!

[issigonis]

Originally Posted by shankar.balan

Good show. This is certainly a step in the right direction.
The Mini Cooper will certainly be appreciated more if more people can access it.
But it can never be one's "only" vehicle. Invariably it will end up being the second or even third vehicle for the more affluent families. Else it will be the "rich kid's" vehicle of choice! Much like the way the Gypsy was the "rich kid's" vehicle of choice 20-22 odd years ago!
Sad, but what was once envisaged as a vehicle for the commoner is no longer true of it.
Same goes for the Fiat 500, VW Beetle etc.
And if I am right we are talking ex showroom price for the base level Mini being 16 lacs after local assembly. Including Taxes, Insurance etc in Bangalore, this will be more or less the same price as a Skoda Yeti give or take! Expensive.

While BMW may want to retain their premium image and all that jazz, lets remember that the base level Mini ONE is priced around 10-12K GBP in the UK which translates to about 9 lacs or so give or take!

What really gets my goat is that we are being made to pay a significantly higher amount for the same vehicle as we would pay if we were not in India!

>>>

The design & marketing objective of the BMW Mini is very different from that of the design & marketing objective of the original Mini. That drives the prices of the BMW Mini.

I will be highly surprised if BMW were to drop its price drastically, for its a halo model, with the (well hidden) purpose of attracting the decisive 18-25 age group, hip crowd to make them followers and ultimately customers of BMW - nothing wrong in that.

The pricing aspect in India vis-avis Britain is similar to prices obtaining in developed vis-avis developing countries with the usual bag of reasons - higher import duties, CBU/CKD, insufficient demand to justify full manufacture and so on.

Regards
issigonis

[shashank.nk]

If BMW is looking for better numbers, i wonder how much they're looking to achieve by going the CKD route.

If a hot hatch is not affordable to many at 25 lakhs ex-showroom, it still wont find any significant increase in buyers at the rumored 16 lakh price. Not to forget its a petrol and a comfortable 2 seater at 16 odd lakhs, which means it has to be a 2nd or 3rd car depending on the usage/need.

Will be interesting to see how much the sales would increase by if this ever happens

[AlphaKilo]

Originally Posted by shankar.balan

Good show. This is certainly a step in the right direction.
The Mini Cooper will certainly be appreciated more if more people can access it.
What really gets my goat is that we are being made to pay a significantly higher amount for the same vehicle as we would pay if we were not in India!

And not to forget, we don't get basic safety systems as standard or the bells and whistles that are normally available in the other markets where such cars are being sold for sometime now.

[Parthasarathig]

Originally Posted by GTO

Inside sources

The tiny Mini, even at 16 lakhs, is as premium as premium can be. Remember, BMW wants volumes. Else they wouldn't be selling X1s for 23 lakhs or the stripped-down 320D that can be embarrassed by an i20 in equipment.

Internationally yes. They also have a manual transmission!

They should bring in the diesel. They wouldnt be able to handle the tremendous volumes then
Will they price the MT version higher given its demand by enthusiasts? Doubtful if they will ever bring in the MT. MT and diesel in this country should satisfy me thoroughly except the price tag.

Originally Posted by shankar.balan

While BMW may want to retain their premium image and all that jazz, lets remember that the base level Mini ONE is priced around 10-12K GBP in the UK which translates to about 9 lacs or so give or take!

What really gets my goat is that we are being made to pay a significantly higher amount for the same vehicle as we would pay if we were not in India!

Same here. I dont understand do they think we dont have internet in India? The prices of cars that enjoy a premium here is so much less outside. Nothing can be done as people keep paying for this. These brands tend to cash in on their perceived premiumness and folks keep paying for them.

The price of an E 350 V6 petrol costs $51,160 in the US which is affordable for but the price in India of the same model is 51.45lacs INR ex showroom. Now who would not be irked by this disparity?

The extra taxes we pay for these vehicles dont seem to improve the road conditions also.

And BMW cannot even become a mass manufacturer here. So it cant think much volumes either. Or else it is highly afraid of losing its premiumness. On top of that they have got the guts to even cut down on many safety features making them available only in top end models. Plus the german cars are highly unreliable and you end up paying more for the flatbed trailers.

My views are welcome to be contradicted.

Regards.

[shankar.balan]

Originally Posted by issigonis

>>>

The design & marketing objective of the BMW Mini is very different from that of the design & marketing objective of the original Mini. That drives the prices of the BMW Mini.

I will be highly surprised if BMW were to drop its price drastically, for its a halo model, with the (well hidden) purpose of attracting the decisive 18-25 age group, hip crowd to make them followers and ultimately customers of BMW - nothing wrong in that.

The pricing aspect in India vis-avis Britain is similar to prices obtaining in developed vis-avis developing countries with the usual bag of reasons - higher import duties, CBU/CKD, insufficient demand to justify full manufacture and so on.

Regards
issigonis

Appreciate the point of view completely.

Also would be really pleased if the BMW chaps would use the Mini as the base level inducement vehicle to enter the brand. However, it would need to be priced well, for that to happen. They would need to consider pricing it at around12 to 14 lacs on Road for an iconic car like this one, however basic in trim level, as opposed to the likely 20 lac price range which is what will happen if the ex showroom price is 16 lacs.

[Mindgrinder]

great news my friend in BMW PR was telling me its premium segment etc, i told her BMW is just testing waters they are not going to place Mini in as premium range as Beetel..she did not agree, now this is a news that says BMW is looking for numbers, atleast they would have some product to compete with B-Class Mercedes, although different segments and target audience but you need to have a product in range.

[AlphaKilo]

Originally Posted by Mindgrinder

great news my friend in BMW PR was telling me its premium segment etc, i told her BMW is just testing waters they are not going to place Mini in as premium range as Beetel..she did not agree, now this is a news that says BMW is looking for numbers, atleast they would have some product to compete with B-Class Mercedes, although different segments and target audience but you need to have a product in range.

Thats utter non-sense imho. As you said, they are two completely different cars catering to different needs. Its like comparing apples and oranges, but, offer an orange to a customer who wants to buy an apple worth 25lakhs, and say that it too costs the same amount, hence apple = orange. Is BMW India gone crazy or is there some wrong information going around.

[noopster]

I don't see the logic of launching a CBU model at an inflated price and then reducing the price once it goes CKD. I mean- I get the reason but it's a fail planning-wise. When you launch a product, you need to price it as per a business plan. Which means you take into account future localisation etc. and come up with a price that is appropriate, perhaps taking a hit on margins on the CBUs initially to build the market.

Imagine if I go buy a 25 lac car today and that same car is available for 16L tomorrow. I will feel like a fool and in one fell swoop the perceived premiumness of the vehicle is destroyed. It doesn't have to be a Cooper. Take the Fortuner: if the price dropped suddenly, there will be a million happy souls like me who would probably rush to the nearest Toyota showroom with a chequebook, but it will kill those proud and happy owners who spent so much more to acquire it.

Am pretty skeptical BMW will reduce the Mini's price so drastically. Maybe the higher variants may become a litle more affordable but at the entry level, I believe they will maintain their pricing.

[Turbanator]

The iconic Mini Cooper might just become more reasonably priced

Yes this is correct , as per my information , first CKD will be Countryman Diesel under 25 Lac .