Challenges Ahead of BMW in India

The rise in customs duty on completely knocked down (CKD) imports of cars is hurting Make In India, BMW Group India president Vikram Pawah said. 

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Vikram Pawah, BMW

The rise in customs duty on completely knocked down (CKD) imports of cars is hurting Make In India, BMW Group India president Vikram Pawah said. Lower duties will reduce costs and increase demand as well as production, which could lead to greater in-digenisation of auto products, he said on the sidelines of 11th anniversary of BMW’s commencement of manufacturing operations in India.

He said India needs a clear roadmap to promote electric vehicles.

Pawah said that as of now components equivalent to 50% of the cost of the product are procured locally, but equal parts need to be imported, and the rise in customs duty will adversely affect the costing and, in turn, demand. “When we started operations in Chennai in 2007, all the parts were imported. Now 50% of them are sourced locally. We need the demand in sufficient quantity to increase indigenisation,” he said.

Pawah said the country also needs a clear cut roadmap to encourage electric vehicles to reduce carbon emissions. He highlighted three requirements for it, including proper policy framework, setting up of charging infrastructure and long-term stability in objectives and policies.

“The customer needs to be assured about the product he buys. If he is even a little anxious, he will not buy,” he said.

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