BMW looking to source components from India

BMW India, which is selling highest number of luxury cars in India, is eying to source car components from India in next two years. The company is already sourcing components for its motorcycle business including castings, gears and assembly parts from the country. Mr Klaus Draeger, member of board of management with responsibilities of development, BMW, said in company's recent Annual Accounts Conference in Munich that the process of sourcing will be done through company's purchasing office in India.

BMW India is not the first company which is sourcing components from India, as many major car makers including General Motors, Fiat, Ford and Volkswagen are sourcing components worth Rs 4,600 crore each from India.

The company has taken this decision to cut-down the manufacturing costs as it has registered a fall in sales of both cars and two wheelers in year 2009. Where the last year's car sales of BMW decreased by 10.4%, the two wheeler sales decreased by 14.1 percent.

As the income of middle class is going through a good increase the major car makers from the world trying to make the most of it by sourcing components and launching their small cars in India. In recent months many small cars has been launched in the country including Chevrolet Beat in January, and Ford Figo and Volkswagen Polo in March. Besides this, in coming months many new small cars are expected to hit the Indian roads including a new small car from Honda, Toyota Etios, Nissan Micra, a small car from Fiat and an ultra low cost car from Nissan-Renault-Bajaj partnership.

As per the Automotive Component Manufacturers Association of India (ACMA), the export from the country's auto industry is going to register a high increase in coming years and the industry will be drawing half of its turnover by export by year 2016.