After beating Mercedes last year as the number one luxury car maker in India, German firm BMW plans to increase the production capacity at its Chennai plant. While Mercedes sold 3,247 units, BMW managed to sell 3,619 cars. This year, BMW aspires to pull off double digit growth. It predicts sales of over 4,000 units in 2010.

With its sales target going beyond production capacity at the Chennai plant, BMW is looking to increase yield there soon. Currently, the plant is capable of producing 3,000 units a year. BMW will invest more on the plant but the final figure is yet to be fixed. Details regarding the matter will soon be shared.

After three and half years in the Indian market BMW has convincingly done very well. It has a 41 per cent share in the Indian premium segment market against 9 per cent in 2006 when it started operations in India.

BMW sold a total of 709 cars in the first two months this year, registering a growth of 38 per cent over the same period last year. It plans to further invest here and also increase its manpower. Currently 160 people are employed at BMW's Chennai plant. The head count at the plant is likely to increase by 30 per cent in 2010. The increase in manpower will help BMW meet the needs of assembling the SUV X1 which will be launched in India later this year.

The X1 will be launched in both petrol and diesel variants with a price tag of around Rs 25 lakh. The car will possibly push BMW's volumes up in a big way. BMW has not yet finalized on the production figure for the X1 but plans to sell over 500 units a year.

BMW will also start assembling the new 5 Series at the Chennai plant in another 4 months. In an attempt to meet its sales targets, BMW is also increasing dealerships to 24 by the end 2010. Currently India houses 17 BMW dealerships. The company would focus more on Tier II cities.