Bavaria offers vast investment opportunities for Indian firms

Bavaria, the largest German State with Munich as its capital, tops the list by contributing 30 per cent of the country’s GDP. The State’s auto sector alone contributes Euro 90 billion, constituting 20 per cent of its GDP of Euro 450 billion.

Bavaria is also home for many leading automobile manufacturers like BMW, Audi and MAN, as well as auto component majors such as Bosch, Delphi, Denso, Valeo, Lear, Faurecia, Siemens, etc.

In fact, BMW, which stands for Bavarian Motor Works, has several units in operation in the region. Thus the automotive industry is always considered the backbone of the Bavarian economy.

Outlining its credentials in an exclusive interview to MOTORINDIA, Mr. John Kottayil, Executive Director, State of Bavaria, Germany, India Office, said since the Indian automotive sector has emerged one of the fastest growing and most vibrant in recent years, Bavaria offers huge potential for effective tapping by Indian companies.

The falling rupee value against the Euro also offers a great advantage for Indian investors. By setting up operations in Bavaria, Indian companies can directly supply to Bavarian OEMs.

Already several Japanese auto companies have established their operations in the Bavarian region, and now Chinese companies have started eagerly looking for investment opportunities there. Basically, the Bavarian auto sector has seven areas of competence like engineering, electronics, plastics, etc. To support the growing OEM activities in the region, as many as 1,100 automotive-related suppliers have set up production facilities there. In order to further boost investments to the State, the local Government has also taken the new initiative of establishing an automotive cluster. Companies in the automotive sector can rely on the dual vocational training system as well as the 11 Bavarian universities and universities of applied sciences to produce highly qualified and motivated young talent. Courses tailored specifically to the automotive industry are available all over the State. The Bavarian universities offer automobile-related knowhow and expertise with the support of industrial projects, while Bavarian universities of applied sciences offer themselves as partners for application-oriented developments. Hence the region is known as the ‘High-Tech Mecca for Innovation’.

As many as 33 MoUs have been signed between the Bavarian and Indian Universities related to different fields, like IIT Chennai, the Indian Institute of Science, Bangalore, etc. In fact, Bavaria was the Partner Country for the 2012 Global Investors Meet held in Bangalore last June. Based on the overwhelming response for it, the meet is expected to lead to good investment flows.

Several Indian auto-related companies such as Tata, Mahindra & Mahindra, Sundram Fasteners and Sona, as well as IT-related firms like TCS and Satyam have already set up their operation in Germany. Earlier, the ACMA delegation visit to Bavaria had detailed discussions with the local OEMs.

Referring to the current global scenario, Mr. Kottayil said there is no slowdown as such as far as Bavaria is concerned, and the State’s industrial performance is particularly impressive. The State’s growth is mainly driven by the vast network with other countries to promote investor-friendly relations.

As for bilateral trade between India and Bavaria, it touched a level of Euro 2 billion in 2011 against Euro 1.7 billion the previous year. This year this is expected to touch a still higher level.