BMW India starts assembling engines locally to avoid higher duties

Wednesday 11 May 2011, 00:00 AM by Vikas Yogi

The leading luxury car maker BMW India said on Tuesday that the company has started assembling the engines of 3Series and 5Series sedans, as well as compact luxury sports utility vehicle (SUV) X1 at its Chennai facility. The move has been taken in a bid to avoid the increased customs duty of 30 percent. It is to be mentioned here that the government of India has recently increased the customs duty on the pre-assembled engines, transmissions and gearboxes of luxury cars assembled in India to 30 percent as compared to the previous rate of 10 percent.

BMW India starts assembling engines locally to avoid higher duties |

Speaking to reporters at a conference in National Capital, BMW India President Andreas Schaaf said, "At this point of time, our completely knocked down (CKD) operations are fully fulfilling the new regulations. We are paying 10 per cent duty. There will be no price hike."

In the BMW engines, the company does more than 50 percent assembly in the Indian market, thus these engines are considered locally assembled, said Mr. Schaaf.

At present, BMW India assembles three of its portfolio cars in the Indian market including luxury sedans like 3 Series, 5 Series and the recently rolled-out compact SUV BMW X1.

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