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BMW seeks government permission to set up Indian assembly plant

BMW has sought permission from the Indian government to set up a $40m (£23m) manufacturing plant, the Indian Business Line newspaper reported today.

A proposal from BMW AG and BMW Holdings BV is awaiting clearance from the Foreign Investment Promotion Board, according to the Indian Finance Ministry web site. It said the plant would assemble 3 and 5-series cars from knocked down kits, and import fully built-up units.

The Business Line said BMW intended to buy out its subsidiary, BMW India Pvt. Ltd. An earlier attempt at Indian car market entry in the late 1990s was to have taken the form of a joint venture with the Indian Hero group, which builds Hondas in the country, but BMW’s proposed investment was below the minimum prescribed under the government’s policy.

BMW also attempted a separate JV with Hero to market its motorcycles in India, but success was denied after they met price resistance.

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