The German automobile company BMW is on the business of sourcing the components – gears, assembly parts and castings – from India. There is a move to source the parts for its cars from India and it will materialize in two years. For this purpose, the company will unveil a purchase office in India, said the board member. But the exact volume of sourcing is not available amidst the figures dealt by Fiat, Ford, VW and GM making components sourcing for $1 billion (Rs4600 crore).
BMW made this move to reckon the finance control in the wake of cost and the dip in demand in 2009. The sale figure for BMW cars was down by 10.4% and 14.1% in motorcycles. The net profit too fell down to $210 Euro indicating 36.4% fall than 2008. Having sensed the quality of engine components in India, the member said, BMW is keen on sourcing parts for its cars and the ones for the manufacture of small car in 2014. This is in line with other giants like Fiat, GM, Toyota and VW.
The report from the Automotive Component Manufacturers Association of India indicates that the Indian component would get sourcing of nearly 50% of its business from the exports within 2016. This is possible due to the advanced R&D, and the quality components from the makers in India. The existing turnover of the component business in the country is around $20 billion which is expected to double ($40billion) in another 5 years.