Car manufacturing giant BMW inaugurated its assembly plant in southern Indian state Tamil Nadu Thursday, according to India-Asian News Service.

The plant, located at Chengalpattu, 40 km south of Tamil Nadu's capital Chennai, has a capacity of 1,700 vehicles a year.

"India offers big opportunities for growth, particularly in the premium automobile segment," said Norbert Reithofer, chairman of BMW AG, at a press conference there.

Three BMW models will be marketed in India. The lowest priced 3- Series vehicle will cost 2.6 million rupees (60,000 U.S. dollars) while the higher range can go up to 4.2 million rupees (96,700 U.S. dollars), he said.

But so far only the seats of the cars are being made in India and the rest of the parts are being imported.

Reithofer said the doors of the cars will be manufactured in India and the company will not export its Indian products.

BMW now has a distribution network of 12 dealers in the main cities like Mumbai, New Delhi, Chennai and Hyderabad and plans to double it by 2007, he said.

"Our goal is to seize all opportunities that arise for our three automotive brands BMW, MINI and Rolls-Royce," Reithofer said.