Petrol Stop - BMW to lease cars for specific periods to customers

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BMW to lease cars for specific periods to customers

Tuesday, 02 February 2010

03 Feb 2010;economictimes.indiatimes.com:Chanchal Pal Chauhan:NEW DELHI: Luxury cars will become affordable with BMW India planning to lease out cars to individual customers not preferring outright purchase. The German car company will lease such cars for specific periods and also take them back for re-sale. BMW, which edged out its global arch-rival Mercedes-Benz to attain leadership in the domestic luxe car market in 2009, is looking to consolidate its market share in the 9000 units-a-year luxury car market. The lease business will also help the company build inventory for its used car business - the BMW Premium Selection - to be launched by the year end. Under this, BMW will sell cars returned by customers after some years of use as well as the company-owned fleet used by its own executives. The company with re-furbish these old cars and sell them under its own warranty and also provide complete service backup through its dealers just as it does for its new cars. BMW India president Peter Kronschabl told ET, “In the three years of operations we have realised that a large number of customers want to own a BMW product, but not exactly buy it at the regular ex-showroom price. We are leasing to companies but this is the first time we are tapping individual customers.” BMW sold 3,619 units against Mercedes Benz’s 3,247 in 2009. It will also invest $50 million in its auto loan business — BMW Financial Services — to provide retail finance to BMW buyers and dedicated finance to dealers. The business will also provide automotive insurance cover to customers with a local partner. “ Used cars customers would be treated at par with new car owners.’’ BMW has also announced plans to manufacture its entry-level sports utility vehicle (SUV), the X-1 at its Chennai factory by the year end. The new SUV will be the cheapest car from the BMW stable and will be positioned below the 3Series which comes at Rs 27 (ex-showroom) Delhi.