BMW financial arm launches India operations
BMW's financing arm launched operations in India on Tuesday, offering loans for purchases of cars produced by the luxury German vehicle maker.
The move comes after BMW said this month it was ramping up production capacity at its factory in the southern city of Chennai as it moves to tap the rising spending power of India's newly affluent consumers.
Sanjiv Shah, chief executive of BMW Financial Services in India, said the unit will be the only financier for BMW cars in the country.
Luxury cars represent just 0.5 percent of total car sales in India, but vehicle makers say the market's potential is increasing as the country's economy grows by nearly nine percent each year.
The BMW group will invest 50 million dollars in its Indian financial services business, BMW Financial Services Chief Executive Georg Bauer said.
The company will offer vehicle finance and auto insurance to customers in India, Bauer said.
BMW Financial Services also plans to start offering loans for cars made by other automakers. BMW Financial Services globally offers auto loans for car brands other than BMW.
BMW's Chennai site will soon produce 5,400 vehicles per year, up from 3,000 currently, and from November begin producing the X1 model, in addition to the 3 series and 5 series now built at the plant.
BMW established a presence in India in 2006 and has seen steady growth in sales since then. In the first eight months of this year, the company sold 3,300 vehicles, nearly matching its full-year sales for 2009.
(-- Dow Jones Newswires contributed to this article --)
© 2010 AFP