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Old 4th February 2015, 11:30   #1
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Default BMW increases level of localisation at Chennai plant to 50%

German luxury carmaker BMW has started sourcing different components for local production of its cars at the Chennai plant from various Indian manufacturers. The company's suppliers include Force Motors, ZF Hero Chassis, Draexlmaier India, Tenneco Automotive India, Valeo India, Mahle Behr and Lear India. With the addition of the new partners, BMW has increased it level of localisation at its Chennai plant to approximately 50%.

Here’s a quick look at the components sourced from the various suppliers:
  • Engines and gearboxes - Force Motors
  • Axles - ZF Hero Chassis
  • Door panels and wiring harness - Draexlmaier India
  • Exhaust systems - Tenneco Automotive India
  • Heating, ventilating, air-conditioning and cooling modules - Valeo India and Mahle Behr
  • Seats - Lear India
BMW's Chennai facility started operations on 29 March 2007. Till date, the BMW Group has invested Rs. 3.9 billion in the plant. The facility has two assembly lines and locally assembles models such as the 1-Series, 3-Series, 3-Series Gran Turismo, 5-Series, 7-Series, X1, X3 and X5.

Higher levels of localisation are expected to help BMW keep prices of its products competitive.

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BMW increases level of localisation at Chennai plant to 50%-bmw2.jpeg
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Old 4th February 2015, 14:30   #2
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Default Re: BMW increases level of localisation at Chennai plant to 50%

This is really good for BMW. Now can this bring down the cost of the car or is this being done just for their own benefit.

Very impressive for Force Motors to be supplying components for the engine and gearbox.
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Old 4th February 2015, 15:30   #3
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Default Re: BMW increases level of localisation at Chennai plant to 50%

That is good news in two senses.
First, this will help keep BMW's manufacturing and ASS costs low, due to lower import duties and help make the car cheaper.
Secondly, it shows how competent part manufacturing companies in India have become. The fact that a company like BMW is agreeing to use locally manufactured parts (that too 50%) shows how much as a country we have progressed.

However, watching the current trend, BMW's prices have only gone North. The price rises have been substantial, and their ASS packages have touched astronomical costs.
If they have increased localisation, shouldn't the parts, and the ASS packages become cheaper too?

I believe BMW can do better than selling ~1/2 the cars Merc & Audi are selling. Its their horrendous pricing strategies that are keeping customers away.
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Old 4th February 2015, 15:46   #4
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Default Re: BMW increases level of localisation at Chennai plant to 50%

Quote:
Originally Posted by sandeepmohan View Post
Now can this bring down the cost of the car or is this being done just for their own benefit.
There is no chance that the currently inflated prices of BMW will come down. That said, this move will help protect against future price hikes due to a change in tax structure, forex rates etc.

A benefit to owners might be cheaper spares.

Quote:
Very impressive for Force Motors to be supplying components for the engine and gearbox.
They've been supplying to Mercedes since nearly 2 decades now.

Quote:
Force Motors assembles and tests the Mercedes Benz engines for C, E, S, GL and M Class cars and SUVs made in India since 1997. The portfolio has gradually grown to include the front and rear axles for the luxury cars as well.

The newer models, including the prestigious and most advanced S Class engines for the top of the line S Class cars made in India are now assembled at Force Motors.

It is a matter of immense pride and satisfaction that we have assembled and supplied over 42,000 engines till date and the association is growing stronger.

Our facilities which are TS 16949:2002, VDA 6.3 compliant and OHSAS 18001:2007 compliant have consistently exceeded the score of 98% in quality performance over the past several years.

We were also awarded the Mercedes Quality award twice.
Source
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Old 4th February 2015, 15:47   #5
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Default Re: BMW increases level of localisation at Chennai plant to 50%

Quote:
Originally Posted by sandeepmohan View Post
Now can this bring down the cost of the car or is this being done just for their own benefit.
Though localization should bring down the part cost, OEs can't / won't pass the benefit immediately to the buyer. They must have invested a lot in local development and tooling and the low cost part (local) should pay back all of those investments before they (OEs) think about passing the benefit to customer.
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Old 4th February 2015, 16:34   #6
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Default Re: BMW increases level of localisation at Chennai plant to 50%

Quote:
Originally Posted by GTO View Post
They've been supplying to Mercedes since nearly 2 decades now.
I knew there was some tie up by means of the legendary Traveller. I did not know this had passed to the cars too.

The Traveller TD DI, is not what it used to be though as far as the power train goes. If you've listened to the engine note, it sounds more like the Matador engine and seems to age faster. This is just on observation. I have never driven one. The Common Rail diesel sounds very refined and quiet.
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Old 1st May 2015, 11:21   #7
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Default Re: BMW increases level of localisation at Chennai plant to 50%

BMW has increased its investment in India from Rs. 390 crore to Rs. 490 crore. The company plans to introduce 15 new models this year and to increase its dealership network to 50 with a focus on tier-2 cities.

Link to Team-BHP News Article
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Old 2nd May 2015, 14:41   #8
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Default Re: BMW increases level of localisation at Chennai plant to 50%

A bit of accounting jugglery.

I know for a fact that the engines and axles, used by Mercedes India, are imported in CKD condition and are delivered directly to the assigned vendor. Said vendor does the assembly and testing before supplying to MBIL at Chakan. They do tom-tomming about town claiming indigenisation. They are only saving due to the difference in customs duty. And still manage to sell the vehicles at inflated prices.

BMW now seems to be following the same path. The day they they localise the castings, forgings and machining they will be able to really drop their prices. But that would dilute their brand positioning. So fat chance of that happening.

Last edited by GTO : 6th May 2015 at 23:31. Reason: Typos
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Old 7th May 2015, 19:18   #9
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Default Re: BMW increases level of localisation at Chennai plant to 50%

Sachin at the BMW Factory. Press release says he's 'making BMWs', but he's really just posing for the camera .

BMW increases level of localisation at Chennai plant to 50%-08-sachin-making-bmw-bmw-plant-chennai.jpg

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BMW increases level of localisation at Chennai plant to 50%-11-sachin-gets-crash-course-making-bmw.jpeg
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Old 8th May 2015, 01:12   #10
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Default Single Unit 'Sachin edition' BMW 5 series

The little master took part in assembling 5 series at the companies Chennai plant. Avid fan and collector of BMWs , tightened the bolts to fix the engine in the shell.
Now that's what I call a true brand ambassador! Not only he is promoting the brand, but also enjoying going through such process.

Source: http://m.ibnlive.com/news/cricketnex...544293-78.html
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Old 8th May 2015, 08:40   #11
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Default Re: Single Unit 'Sachin edition' BMW 5 series

Some pics from ET:

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Quote:
Originally Posted by ET
On his visit to the BMW plant, Tendulkar said, "It was a dream come true for me, a great opportunity. I never thought of being here. Being a car enthusiast, to actually understand what goes behind building a super world class car is amazing. I met all the 550 employees (of the factory) and felt the energy. It has been an enriching experience. Thank you very much for making this day special".

When BMW Chennai Plant Managing Director, Robert Fritrang requested Tendulkar to formally assemble a BMW 5 Series car commemorating BMW proposal to increase localisation level to 50 per cent, Tendulkar said, it was exciting and something he had never done in the past.

"It was first ever experience for me knowing what was on in this amazing plant.It is a memorable thing for me".
Economic Times
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Old 8th May 2015, 15:33   #12
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Default Re: BMW increases level of localisation at Chennai plant to 50%

Quote:
Originally Posted by GTO View Post
Sachin at the BMW Factory. Press release says he's 'making BMWs', but he's really just posing for the camera .
Among the leading german luxury car brands in India (BMW, Audi and MB), IIRC only BMW has a brand ambassador. I don't understand their logic. The 530d pictured has almost everything that is best in its class and someone shopping in this segment would not be very bothered about cricket celebrity endorsements.
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Old 13th May 2015, 16:25   #13
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Default Re: BMW increases level of localisation at Chennai plant to 50%

BMW just shared a video of Sachin at the plant

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Old 13th May 2015, 17:09   #14
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Default Re: BMW increases level of localisation at Chennai plant to 50%

Quote:
Originally Posted by petroguzzler View Post
Among the leading german luxury car brands in India (BMW, Audi and MB), IIRC only BMW has a brand ambassador. I don't understand their logic. The 530d pictured has almost everything that is best in its class and someone shopping in this segment would not be very bothered about cricket celebrity endorsements.
I would like to counter that by saying that other brands like Audi also have people like Salman Khan endorsing their products such as the Q7. Audi has been a bollywood darling for the last decade or so.

BMW increases level of localisation at Chennai plant to 50%-openning_times.jpg
These brands are more than vehicles, they are a life style. Looking at the short movies (http://en.wikipedia.org/wiki/The_Hire) or the art cars (http://en.bmw-art-cars.de/) and not the least their headquarters & museum we can see how BMW uses people from all walks of to add to the LEGEND that is BMW.

As far as Sachin going to the factory is concerned, i feel that he is a true BMW fan. This can be collaborated by the fact that he talks about BMW outside of just advertisement (IIRC he had an interview where he was talking about wanting to drive the i8) which cannot be said for other brands he is involved with. If anyone of us had the same opportunity, we would probably be camping outside the factory a week before. If Sachin is coming to BMW for anything you better believe BMW will have camera's there, its only logical. But why Sachin an not someone else? Sachin's attributes fit perfectly into the image of a BMW, simply put both are Sporty and Aggressive yet Understated, Dignified and Handsome .

Lastly in the video posted by GTO can you see the faces of the BMW employees. What a feeling it must be to listen to someone you (read everyone) admire, who was the best in his field, telling you that what you are doing here is worthy of appreciation & congratulations. This in itself is worth more to BMW than the rest of the marketing. Motivating people to maintain high standards is a herculean task, more so in India.

Cheers

B.B

Last edited by budgam.boonyi : 13th May 2015 at 17:26. Reason: Thought of additional point.
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Old 10th July 2015, 16:54   #15
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Default Re: BMW increases level of localisation at Chennai plant to 50%

Along with recent price revision, new advert from BMW in which SRT convincingly explains why he prefers performance cars. (Much like his new X5M? )

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