BMW India Warns of Supply Chain Risk If West Asia Conflict Continues

Speaking to ANI in an exclusive interaction, Brar said the company is currently managing the situation due to advanced inventory planning, but continued disruption for another few weeks could create wider supply chain challenges.

"I think for the time being, especially if you talk about BMW, we are sorted because we have six months lead time, so we have to keep a lot of kits with us," he said.

He added that some shipments are currently stuck in transit because of the ongoing situation in the region.

"But if it continues beyond maybe another two months, we have some shipment which is stuck on the way, so some of the cars are stuck, so the waiting period is increasing," Brar said.

He further stated that while the company is largely managing the current disruptions, an extended conflict could create a broader impact on automotive supply chains.

"Largely we are sorted, but if it continues for another three to four weeks, definitely it will have an impact on the overall supply chain," he said.

Brar also spoke about the recently announced India-European Union Free Trade Agreement (FTA), calling it a major opportunity for both India and Europe, especially in the premium automobile segment.

"I see a lot of opportunities. They call it mother of all deals and this trade agreement on both sides will bring in lot of synergy," he said.

According to him, Europe has strong capabilities in premium and luxury automobiles, which could benefit the Indian market once the agreement comes into effect.

He said imported luxury vehicles currently remain expensive because import duties range between 70 per cent and 110 per cent.

"So once it kicks in, which is likely to be end of 2027 or beginning of 2028, we will see all the cars which we are importing today getting a benefit," Brar stated.

At the same time, he said BMW India may not see major benefits for locally manufactured vehicles since around 95 per cent of local manufacturing is already being done in India.

"While we are doing 95 per cent local manufacturing, I don't see much benefit there. But for the remaining 5 per cent, I definitely see a big benefit," he said.

Brar also highlighted opportunities for supply chain integration between India and Europe under the trade agreement.

He said India has developed strong local supply chain capabilities, which could help increase exports of automotive components to other countries.

"India is very strong in the local supply chain. Once we start exporting these parts to other countries, I think it can give a lot of benefits," he said.

He added that Europe also has strength in several specialised components and both sides are expected to benefit mutually through deeper economic and industrial cooperation under the FTA.

- ANI