MUMBAI (Reuters) -- BMW Group’s India unit said it will partner with seven domestic suppliers to source components for local production of cars at its Chennai plant in southern India.
BMW assembles the 1 series, 3 series and 5 series in Chennai, as well as the X1, X3 and X5 SUVs, the automaker said.
With the addition of the partners, which include Force Motors Ltd., Tenneco Automotive India and Lear India, the level of localization at the company's Chennai plant will increase to about 50 percent, BMW Group India said in a statement.
Shares of Pune-based Force Motors, from which BMW will source engines and gearboxes, rose as much as 18 percent on news of the partnership.
BMW Group India said it will also source axles, door panels, wiring harness, exhaust systems, air conditioning and cooling modules and seats from the domestic suppliers.
The local partnerships will help the company optimize costs and set higher quality standards, it said. The automaker raised prices across its range of vehicles by up to 5 percent from January 1.
BMW Group sold a total of 6,812 BMW and Mini vehicles in India last year, a drop of 12 percent on the previous year, the company said.