Identifying India as a key market for its long term growth, German luxury car maker BMW on Thursday opened its first plant in the country and rolled out the '3 Series' sedan, priced at Rs 26.95 lakh (ex-showroom) onwards.

The company will also roll out its other luxury sedan '5 Series' by May-June, which is expected to be priced between Rs 37 lakh to Rs 42 lakh across all variants from this greenfield plant located at Chengelpet, 55 km from Chennai.

"The Indian automobile market offers big opportunities for growth. Opening this plant underpins our long term route to profitable growth," Norbert Reithofer, chairman, BMW executive board said.

The company has invested 20 million euros in setting up the plant, which has a capacity of 1,700 units per annum on a single shift. Reithofer said as the company's operations in India grows bigger in future, the Chennai plant would be upgraded step by step, to even house sourcing centre for global operations and research and development facility.

Although India's contribution to the sales in Asia would be minimal initially, he said the continent was the most dynamic market offering lot of potential and the company's India plans were part of a strategy to establish itself as a force in Asia.

BMW India president Peter Kronschnabl said the company was targeting a sales of 1,200 units in its first year, of which 90 per cent would be locally manufactured cars. Models like the 7 Series, X3, X5 would continue to be imported.

"In the medium term, we expect the number to go up to 1,500," he said. Spread over 89,000 square metres, the plant employs a workforce of 120, with an additional 600 jobs to be created through dealership and service network.

Asked about the possibility of bringing the company's famous brand 'Mini' in India, he said the BMW was currently undertaking a market feasibility. "If the study suggests the product can be viable, then it could be launched by 2009," he said.

On the possibility of BMW driving its luxury motorcycles into India, he said, the current market situation was not conducive to bring the product. He said the Chennai plant was primarily meant for the domestic market and "there are no plans to export from here.

"This plant is a tool for market entry strategy in India," Kronschnabl said. The company is starting with a network of eight dealers. "By the end of 2009, we will have dealership in all the 10 metros," he said. 

Norbert Reithofer, chairman of the executive board, BMW AG, Norbert Reithofer at the assembly line of BMW's production plant after its formal inauguration in Chennai

 Photograph: STRDEL/AFP/Getty Images