BMW is to begin building Mini cars in India, in a move that suggests confidence in the country’s emerging car market.
The German carmaker said Mini Countryman models would be rolling off the production line at its plant in the port city of Chennai later this year. It described India as an “increasingly significant market” for the BMW Group, Car sales in India have grown rapidly in recent years, attracting investment from major brands.
BMW has operated its own sales company in India since 2007, and began selling the Mini in the country in 2012. It sold just over 300 Minis in the first year.
Savings on tariffs, BMW said the decision to move production there was in line with its “production follows the market” strategy. Analysts suggest the move will help BMW save on import duties.
India charges 100% tariffs on the import of fully built cars, but just 30% on cars assembled domestically from imported parts. Currently, the Mini is built in the UK and Austria, while BMW’s Chennai plant already makes several BMW models for the Indian market.
Mini’s move suggests growing confidence in the Indian market, where car ownership is just 1.5 cars per 100 people in one of the world’s fastest growing economies. But although sales have risen strongly in recent years, the latest figures suggest the market is experiencing a sharp slow-down.
Figures released last week by the Society of Indian Automobile Manufacturers showed sales fell by 6.7% over the last 12 months – the first fall in a decade. That has forced some domestic brands to cut production and showroom prices.