Challenges for BMW in the Coming Years

PART - 2

Meanwhile, to boost business in India and keep the cost down to a minimum, the company has invested more capital in its existing factory located in Chennai so that it can build more cars here. BMW is positioning the factory in India as a regional hub from where cars are exported all over the world. The recent downturn in the world economy has hurt the auto industry adversely and export figures are at a dismal low. According to the company sources, only half of the installed capacity of the Chennai factory is utilised now to produce new cars. At its Chennai plant, BMW assembles semi knockdown kits and completely knocked down kits of its select models imported from Germany to build cars. But the slowing economy of the world has hurt the sales figures of BMW significantly.

To deal with the situation BMW is mulling to reduce the price of some select models to boost the sale and not to increase its capacity any further. This has affected its earlier plan to build a completely new plant in India in the near future. BMW officials have blamed a host of issues in addition to the economic downturn for their less than glowing financial showing. According to top officials, the industry is beset by an adverse tax system. These include increased tax rate on carbon dioxide emission, fuel efficiency and E85-gasohol compatibility.

Increasingly, the used cars are also eating into its sales figures. Recent reports suggest that used BMW carssale has skyrocketed in the recent times and now account for a sizable figure in emerging markets. There are several reasons behind the amazing show of second-hand car sales figures. The most important of these reasons is the drop dead price tag of these cars, which make them affordable to that section of people who were earlier scared off by the hefty price tag of a BMW car. Other than the price issue, the refurbished cars by the company sold in the emerging market look almost new.

These cars are checked by BMW engineers for their quality and certified by the same for sale. This quality assurance from the company is attracting several buyers towards buying used BMW cars. A warranty for the product by the company is acting as a cherry for this attractive deal. For even better prices, you can always look to buy from a used car dealer. However, it would be wise that before you go down the route of buying from a non-authorized dealer you should take a hard look at the product he is selling before you put down your hard cash for a used car.