BMW India plans on procuring engines for their next generation vehicles from Pune based Force Motors. BMW is facing stiff competition in the local market, from Audi India and Mercedes Benz India, apart from other Japanese and local car companies. Mercedes Benz India has been procuring engines locally from Force Motors and this has heavily reduced import duty.
BMW is bleeding profusely due to Mercedes Benz’ policies and they plan on following their compatriot’s footsteps, in order to gain access to a wider stratum of society. Force Motors will be in charge of manufacturing BMW’s engine and transmission system, which will then be assembled at BMW’s local plants.
BMW was against manufacturing parts locally and always favored importing parts for their vehicles. This made them susceptible to heavy fines, amounting to $100 Million. The German car makers therefore had to come up with a different solution, if they wanted to survive tough market conditions.
