BMW s set to get less expensive

BMW has inaugurated its India operations with an assembly plant in Chennai. BMW car prices in India will now fall by 30 to 40% .

BMW 3-series cars are assembled at its Chennai plant. By May, this plant will also assemble 5-series models. BMW says the inauguration of the plant fits in with a larger vision of focussing on the Asian market.

"Our market entry in India is an important step that will contribute to our group's profitable growth in Asia. 2007 is the year of India," said Dr Norbert Reithofer, Chairman, BMW Group.

Prices of the 3 series and 5 series in India will drop by almost a third, ranging from Rs 26.95 lacs for the 320i to Rs 45 lakh for the 530i. The company says only the seats and the door panels are being sourced locally and that's why the prices are higher than its arch rival the Mercedes Benz whose prices start at about Rs 20 lakh.

Mercedes Benz sells 2000 cars a year in India but BMW has more modest targets. BMW expects to sell 1200 cars in India, but within three years, that number will rise to 1500.