Just six months into production in India, German luxury car major BMW is planning to set up an assembly line for its sports utility vehicles (SUV) X3 and X5. The facility is likely to be ready by middle or end of next year, said sources.

Currently the 2.5 litre, 6-cylinder petrol engine X3 and the seven-seater X5 are imported through the CBU (completely built units) route and sold at Rs 60 lakh and above due to high import duty. With the new assembly line, the production of these SUVs in India could see a price drop by over 50%. BMW achieved similar market advantage when it started the assembly of 3-series and 5-series at its plant in Mahindra World City near Chennai.

However, when contacted, Peter Kronschnabl, president, BMW India said, “At the moment, we have no plans for any expansion as we’re looking to stabilise on what we’re doing.”

Though initially the assembly line would roll out the X3s, the X5s will follow. “This will give the luxury marquee SUVs a competitive advantage in pricing over its competitors, the Mercedes M-class and Audi Quattro,” said an industry observer.

Also in the pipeline are two new variants in the 3-series range. “We’re evaluating the possibilities to launch a coupe and a convertible,” said Kronschnabl, indicating that any launch would happen next year.
However, sources said that BMW would also expand its 5-series portfolio by introducing 5-series station wagon.