Luxury carmaker BMW Group does not see the free trade agreement (FTA) between India and the European Union leading to any immediate expansion in its manufacturing footprint in the country, though it expects the pact to widen access to imported premium and performance cars once the agreement is implemented.
Speaking on the likely impact of the FTA, Hardeep Singh Brar told TNIE that the company already has adequate production capacity in India and does not foresee fresh investments in manufacturing solely because of the trade deal.
“I think we already have enough capacity. We have a capacity of 50,000 units. So, I don't see any further capacity coming because of the FTA,” Brar said.
The comments come at a time when India is aiming to establish itself as a manufacturing and export hub through several trade agreements offering reduced or zero tariffs and regulatory relaxations.
Brar said the biggest gain for BMW from the agreement would be in the imported car segment rather than locally manufactured vehicles. According to him, imported cars currently account for around 5% of BMW’s India sales, and this could rise to 7-8% once the agreement is implemented.
“Not significant, but importantly it will give us access to some of the cars which we are not able to import today — some of the performance cars and some of the luxury cars at the top end,” he said.
Brar also noted that the finer details of the agreement, especially the quota structure and pricing categories for automobile imports, are still awaited. He said greater clarity would emerge once those details are finalised.
“We will get further clarity once we know the quotas in the different price brackets, which is not clear today. We are still waiting for that to come,” he said, adding that imported cars not manufactured in India are likely to benefit the most from the trade pact.
On whether India could emerge as an export hub for BMW and other global automakers under the FTA framework, Brar said it was premature to make such projections.
“I think it is too early to say that. Right now, we are looking at how we can utilise this for imports. Exports are still some time away,” he said.
