BMW Chennai Plant Completes 11 Years; Focuses On Skilling, Overall Growth

Taking Stock May 2018 BMW Chennai Plant Focus Skilling Overall Growth
BMW Chennai Plant Completes 11 Years; Focuses On Skilling, Overall Growth

Since its entry into the market, German luxury carmaker BMW has been successfully operating in India, building a strong base of loyal customers and reach. The company’s manufacturing facility in Chennai has now completed 11 years. To commemorate the occasion, BMW launched its SKILL NEXT initiative. In this feature, we take stock of the company’s journey in India, a market where it is keen to establish itself as a leader in luxury car space.

BMW Group India recently completed 11 years of its presence in India. It was on March 29, 2007 that the BMW Plant Chennai had started operations. Currently, the Chennai plant operates on a single shift, and has 650 employees, including operators as well as other staff. The plant locally produces nine vehicle models including the 3 Series, 3 Series Gran Turismo, 5 Series, 6 Series Gran Turismo, 7 Series, BMW X1, X3, X5 and the MINI Countryman.

To celebrate the 11th anniversary of the Chennai plant, BMW launched the SKILL NEXT technical skilling initiative. Under this initiative, the company is providing 365 engines and transmissions to leading engineering and technical institutes across all states and union territories in the country. SKILL NEXT is aimed at making a strong contribution to skilling India, and will present an opportunity for engineering and technical students to obtain hands-on training on advanced technologies of BMW engine and transmission.

The engines and transmissions will be provided to engineering colleges, industrial training institutes and polytechnics free of cost, on a first-come-first-serve basis, by 2018-end. The engine that is being provided is the BMW TwinPower Turbo, in-line four-cylinder diesel unit, while the transmission is the company’s eight-speed steptronic automatic unit. BMW noted that the engines and transmission being provided under the SKILL NEXT initiative were part of the stock that was affected by the rain and subsequent floods the city had experienced. These parts could not be used in vehicles as per BMW quality standards, but could be used as a learning source to impart theoretical and practical knowledge to students.

Advanced technologies and state-of-the-art tools enable operators to produce high-quality vehicles

The company will also follow up the handover of engines and transmissions with a ‘Train the Trainer’ module that will be devised for institutes, where 40 aftersales master technicians will conduct extensive workshops. The module has been created by professional trainers from BMW Group India Training Centre and BMW Group Plant Chennai. These workshops will be a combination of classroom sessions and hands-on practical sessions, using training materials.

Vikram Pawah, President, BMW Group India said that the Indian luxury car segment has witnessed enormous growth over the last decade and added that there is a huge need for technical talent in the industry. He stated that the SKILL NEXT programme will strongly promote the development of technical competencies in students across the country by enhancing their practical knowledge of advanced automotive technology.

The Chennai plant is made up of highly-skilled workers who manufacture vehicles to global standards

CHENNAI PLANT & LOCALISATION

BMW’s Chennai plant adheres to safety standards that are on par with any other BMW manufacturing facility globally. Dr Jochen Stallkamp, Managing Director, BMW Group Plant Chennai, said that the plant not only produces vehicles on par with global quality requirements, but has also achieved the highest quality rating for certain vehicle models. He added that achieving these standards was possible due to advanced manufacturing processes, advanced technologies, state-of-the-art machinery and most importantly, skilled operators. The BMW Plant Chennai has been the force behind the company’s success in India, and has been instrumental in making it one of the largest growing brands, noted Pawah.

In 2015, BMW had announced its partnership with major Indian automotive component suppliers for sourcing of components, in order to increase the localisation content of vehicles produced locally at Chennai. The suppliers include Force Motors, ZF Hero Chassis, Draexlmaier India, Tenneco Automotive India, Valeo India, Mahle Behr and Lear India. Such a move has increased the localisation level at the BMW Plant Chennai to around 50 %, the company said.

The major components sourced for local production of cars at the BMW Plant Chennai include engine and transmission from Force Motors, axles from ZF Hero Chassis, and door panels & wiring harness from Draexlmaier India. Tenneco Automotive India supplies the exhaust systems, while heating, ventilation, air-conditioning and cooling modules are supplied by Valeo India and Mahle Behr. Seats are supplied by Lear India. In fact, Force Motors, has set up a dedicated facility close to the BMW Plant Chennai, and has supplied over 23,000 engines to BMW.

The partnership of BMW with its suppliers has helped in achieving localisation of about 50 %

INDIA PRESENCE

The BMW Group India comprises three entities – BMW India, MINI and BMW Motorrad and also offers financial services under its subsidiary BMW Financial Services India. Over the years, the company has invested a total of Rs 1,250 cr in BMW India and BMW Financial Services India, thus underpinning its commitment to the Indian market. The company also offers its i8 hybrid sports car from its ‘i’ range of electric models, to customers as a completely built-up unit (CBU).

BMW Group India currently offers 23 car and 15 motorcycle models to customers through its entities, and has over 50 dealer network points for its business. The company had set-up its Motorrad two-wheeler business in India in 2017, and plans to have a total of 10 sales points for this business by 2018-end. Overall, BMW Group India has sold over 73,000 cars in India since its arrival in the Indian market.

It was in 2017 that the company had delivered its best sales performance in India, delivering 9,800 cars to customers, leading to an annual growth of 25 %. On the other hand, the Motorrad brand generated sales of 252 motorcycles within nine months of its launch (April-December 2017). BMW Group India said that the sales growth in 2017 was predominantly driven by the SUV segment, which it calls Sports Activity Vehicle (SAV) segment, especially the X1 compact SAV and the X5 premium SAV. The second half of 2017 also witnessed a spurt in sales with the launch of the new-generation 5 series, the company added.

The BMW Plant Chennai locally produces nine vehicle models at present across different segments

FUTURE ROADMAP

With regards to electrified mobility, Pawah said there is discussion on which form of electric mobility – plug-in hybrid electric vehicle (PHEV), battery electric vehicle (BEV) or full-hybrid electric vehicle (HEV) would be best suited for the country. However, he noted that BMW is looking strongly at the PHEV technology for the country, since it appears to be the most viable one for this market. Pawah also said that BMW will soon make an announcement regarding its PHEVs plans for the country.

BMW hopes to achieve a stronghold of the premium vehicle segment in the country

With a growth of 25 % in the previous year, along with a first quarter growth of 11 % in 2018, Pawah said that the company expects to achieve decent growth in 2018 as well. He said SAVs have contributed to over 42 % of the total sales in India over the last two to three years, and expects this to grow to 50 %, especially with the launch of models like X3 or the X4 next year. Pawah also said that the contribution of sales from its sedan models has also been increasing proportionally, which convinces him that the coming year is going to see a significant upward movement for the company.

TEXT: Naveen Arul

PHOTO: BMW Group India