In order to be competitive in the very price sensitive Indian auto market, the German luxury car manufacturer BMW is planning to get the engines and gearboxes of their cars outsourced to local manufacturers as like Mercedes Benz India. This move will provide cost advantage to BMW which currently stands in third position by sales volume, against its German rivals i.e. Mercedes Benz and Audi.
At present, the cost of BMW cars is slightly on the higher side to the fact that the imported components attract higher import duties. Building and assembling engines and gearboxes locally would allow the company to transfer cost benefit to customers thereby anticipating sales increase.
It is believed that company is going to award engine manufacturing license to Pune based manufacturer Force Motors which is also a supplier of Mercedes Benz India Pvt. Ltd. To serve BMW, Force Motors is planning to set up a new plant in Tamil Nadu.