Coronavirus outbreak won’t impact India supply chain: BMW

GERMAN automaker BMW does not see any impact of supply chain disruption on its India operations till June due to the coronavirus outbreak, a top company official said.

The company said it will have to assess the impact of the outbreak on the products coming in after June.

"As of now we are fine and comfortable for the next quarter (April-June). We have a very clear picture..On certain products which are coming out beyond the quarter, we will have to see how the coronavirus impact pans out," BMW Group India President and CEO Rudratej Singh told PTI.

He, however, added it was a bit early to ascertain the complete impact of the outbreak on the supply chain.

"It is early days right now as the supply chain impact has a lag and I think the lag has not been fully felt by the industry yet. If it persists, things will get worse before they get better in terms of availability of supply chain and we are not seeing it right now," Singh said.

The company would watch the situation arising out of the outbreak very carefully going ahead, he added.

"It is a very fluid situation right now," Singh said.

When asked to comment on the sales outlook for the current year, he said: "We have been competitive relative to others as we have actually comparatively gained segment share last year and in that situation we are confident that we will continue to be competitive this year as well."

The company refreshed its entire range without waiting for BS VI transition and that would help it perform better in the market, Singh said.

"Today, we have the freshest portfolio in the segment and that has helped. It gives us confidence that we will continue to gain segment share. Looking at absolute numbers when there is a slowdown could be dicey," he noted.

BMW sold 9,641 units of BMW and MINI range of cars in 2019.

Singh said the company is focussing on localisation of its product range in the country and expects to carry on with the work going ahead.

"Already, 95 per cent of our volumes come from locally manufactured products already. We are fairly high in our localisation levels over the last few years. We intend to make sure that our strategy going ahead also is in line where barring very very niche products we would look at all our volume products to be manufactured in Chennai," he added.

He noted that it doesn't make sense for local assembly of certain niche products and electric vehicles in the country.

Singh, however, noted that if need be the annual production capacity at the company's Chennai plant could be ramped up to  19,000 units from the current 14,000 units in a single shift basis.

"We can go much higher than what we are selling now so we are very well taken care of in terms of our overall capacity for the next 3-4 years. But yes, the whole idea of supporting the Make in India initiative is something we are fully following," he added.

Not just the manufacturing, the company has a regional purchase office and an IT set-up for taking care of requirements in Asia and other parts of the world, Singh said.