BMW Begins Building Mini Vehicles in India

The German auto maker assembles the car at its factory near the southern port city of Chennai. India is the third country, after the U.K. and Austria, where it builds the Mini.

BMW also assembles the 3 Series and 5 Series sedans, as well as the X1 and X3 sport-utility vehicles in Chennai. It plans to also build the 7 Series and the 1 Series cars at the same location later this year.

Building cars in India helps BMW and other foreign auto makers save on local taxes. India recently increased the import tax on fully built imported cars to 100% of their cost from 75%. Cars made by companies such as BMW, which import engines and gear boxes, attract a 30% duty, while vehicles assembled from both imported and locally produced parts attract a 10% tax.

Other companies such as Daimler AG’s Mercedes-Benz luxury car unit, Audi AG and Tata Motors Ltd.’s Jaguar Land Rover also assemble some of their cars and SUVs in India.

In a press release Wednesday, BMW said producing the Mini locally will help the company meet “the steadily increasing demand” for the car in India.