BMW begin leasing in India
BMW have started to lease cars in India. This comes after the company established themselves as the number one luxury car producer in the country last year, beating off competition from German counterparts Audi and Mercedes-Benz. The company can justify exploring new avenues.
Selected locations of the BMW lease business
BMW will lease their vehicles to individual customers (The general public) and corporate businesses. To start with, BMW will lease cars to six states.
- Andhra Pradesh
- Tamil Nadu
Eventually BMW lease will expand to every single dealership in India.
Part of the company’s growth strategy
BMW car leasing practice will come under the financial services division. Andreas Schaaf has said that the news represents a milestone within the company. He said “The launch of BMW Lease is a significant milestone in our growth strategy in India and will beyond doubt provide sheer driving pleasure with complete peace of mind to BMW customers,”
Two finance options available
There are two options available, an operating lease agreement or a finance lease deal.
Anyone who does take out the lease will see all typical ownership rewards and typical risks associated with full ownership brought upon the customer with an operating lease deal. With a finance lease deal BMW takes on the risks mentioned above. A finance leasing deal will ensure that a customer is able to purchase a vehicle for less than the market price whereas an operating leasing deal means that a customer can only purchase the car at the market price.
BMW India Financial Services Managing Director and the CEO Dan De Christopher have described the idea as a “pioneering product”. He said “BMW Lease is a pioneering product, specially engineered for BMW customers, providing customised financing options, flexible lease tenures and better tax benefits. We are confident that BMW Lease will provide further impetus to BMW India sales,”
An increase in demand
It does make complete sense to begin a leasing practice in India for BMW. Demand for leasing is actually increasing in the country, as many prefer to pay a monthly fee for a brand new car for a certain number of years and then upgrading their vehicle rather than paying it off overall.
Mercedes-Benz has already started a leasing business in India, which has taken off with a decent amount of success.