German luxury car maker BMW on Tuesday said it has set up an Indian finance subsidiary, in which it will invest $50 million this year.
BMW Financial Services will operate as a non-banking finance company and will have three business lines, retail finance, commercial finance and insurance solutions, the firm said in a statement.
BMW, which is 46.7 per cent owned by the widow and children of German industrialist Herbert Quandt, also named Sanjiv Shah as the chief executive of the Indian subsidiary.
The German firm is the latest automaker to form a finance subsidiary in the fast growing Indian market, where auto financing has long been a convenient tool.
Sector peers -- from home-grown Tata Motors and Mahindra & Mahindra, to multinationals like Volkswagen AG -- all have their own Indian financing arms.
The success of the business model in India has also led to a build up in foreign automakers, including General Motors, PSA Peugeot Citroen and Toyota, in Asian rival China, all looking to tap its fledgling auto finance business.
Last month, BMW received an approval to set up an auto financing unit in China, becoming the latest foreign automaker to tap the country's potentially lucrative business.