German auto major BMW Thursday signed an agreement with the Tamil Nadu government for building a car assembly plant in the Pradesh with an investment of 1.8 billion Rupees (39 million US dollars) over five years.

The new facility will be built at Mahindra World City in Maraimalai Nagar near Sriperumbudur, 50 km west of Chennai, capital of Tamil Nadu.

Two other auto majors - Ford and Hyundai - already have manufacturing facilities in this area, according to Indo-Asian News Service.

After a detailed evaluation of infrastructure facilities and support package, BMW decided that Chennai was the best location for establishing its car assembly plant.

Source: Xinhua