Team-BHP - BMW to invest Rs. 130 crore in Indian arm
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-   -   BMW to invest Rs. 130 crore in Indian arm (https://www.team-bhp.com/forum/indian-car-scene/187948-bmw-invest-rs-130-crore-indian-arm.html)

BMW has announced that it will be investing Rs. 130 crore in its Indian arm. This fresh investment will take the German automaker's total investment in India to Rs. 1,250 crore.

Funds from the said investment will be used across BMW Group's operations in the country. This will include the four-wheeler division, BMW Motorrad as well as BMW Financial Services. With this fresh investment, BMW's Indian arm is planning to expand its dealer network in the country. BMW currently has 18 dealer partners with outlets spread over 30 cities. The company's two-wheeler arm - BMW Motorrad is also looking to expand retail operations before launching its mass market offering, the G 310 R.

Talking about the said development, BMW India's President - Vikram Pawah, announced that the company will be expanding its retail sales outlets from 41 to 50 by the next year. The company is also looking forward to launch two new models in the future. These include the new-gen 5 Series and the recently unveiled 6 Series GT.

Source: Car and Bike

It's a great gesture of confidence by BMW in the current times when companies are exiting the market. The investment I think will majorly go towards their financial services arm which will help them make inroads into Tier 2 and 3 cities.
Well done!

wonder if BMW Actually invests at Dealership's infrastructure as Dealer's views are different. Regarding investments in Financial services - that maybe to take advantage of the higher returns in India over the meager returns in Europe and elsewhere. Not exactly an investment in my opinion.

If they had announced setting up an engine plant or a partnership with ZF to set up a transmission plant, it would have been different.

Quote:

Originally Posted by Turbanator (Post 4220078)
Regarding investments in Financial services - that maybe to take advantage of the higher returns in India over the meager returns in Europe and elsewhere. Not exactly an investment in my opinion.

This allows BMW to launch innovative finance schemes to push sales. Low or zero down payment, guaranteed buyback price after 5 years, 4 or 5% interest rates etc. Traditional banks or finance companies might not be able to offer such schemes.

Quote:

If they had announced setting up an engine plant or a partnership with ZF to set up a transmission plant, it would have been different.
Done! Way back in 2015.
http://www.autocarpro.in/news-nation...nai-plant-8366

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Done! Way back in 2015.
Yes, but all these are only buying agreements with no investments most likely. I don't think they take help of anyone else in producing Engines at Germany or USA. What Force Motors does is anybody's guess, I can only imagine bolting some screws on almost ready to assemble engines from CKD kits shipped to Force from BMW Germany. This was necessitated due to revised CKD guidelines a few years back.

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Traditional banks or finance companies might not be able to offer such schemes.
Agreed but does it actually qualify as an Investment perse? I mean giving money to the financial arm which can be taken off whenever required?

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Originally Posted by Stratosphere (Post 4219974)
It's a great gesture of confidence by BMW in the current times when companies are exiting the market.

Also shows how easy it is for a renowned brand to set up CKD operations & rake in the moolah. According to the article:

- BMW has invested 520 crore in India (this isn't counting the 730 crore in its financial services)

- If you count annual sales of 8,000 cars and a net profit of anywhere between 3 - 5 lakhs per car, you recover your investment in merely 1 - 2 years.

The CKD operations don't have to be complex. All they do is screw together stuff that's ready to use. BMW & Mercedes India have even outsourced engine assembly (to Force).

Now you know why even tiny Volvo is going the CKD route in India.

Quote:

Originally Posted by smartcat (Post 4220085)
This allows BMW to launch innovative finance schemes to push sales. Low or zero down payment, guaranteed buyback price after 5 years, 4 or 5% interest rates etc.

Exactly what I was thinking. I was surprised by this, as 130 cr is too low an amount for "investment" in any infrastructure or long term development. I'm surprised that this even warranted a media release.

Maybe this enables them to take money from outside at an extremely low ROI and flush the Indian arm with finance support.


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