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Tuesday, Oct 19, 2004

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`US, European cos look more at China than India for outsourcing'

Our Bureau

Chennai , Oct. 18

AMERICAN and European manufacturers are looking more at China than India as a major outsourcing destination. The Indian industry, including automotive, is losing out to its Chinese counterpart due to lack of brand building abroad, said Mr Peter Koudal, Director, Deloitte Research Manufacturing of the US.

Awareness creation by Indian automotive industry abroad has been relatively lower than the Chinese, he told newspersons at the sidelines of a CII seminar on `Profiting from complexity in the global supply chain.'

Indian manufacturers must sell themselves to multinationals worldwide, and showcase their successful stories, including the winning of Deming award by some of the firms, globally.

Awareness among manufacturers and suppliers abroad on Indians firms is not at the same level as that of the Chinese firms, he said.

Quoting a recent study by Deloitte, a research firm, Mr Koudal said in pursuit of lower cost sourcing, top destinations for North American firms are within the US or Canada, followed by China, Mexico, Japan and India.

Further, in pursuit of lower cost manufacturing centres, the North American firms are looking at opportunities within the US and Canada and then at Mexico, China, Western Europe, Central Europe, and South America and lastly at India. According to Mr Koudal, in a recent survey of 800-plus global companies, 60 per cent said that they were planning to enter or expand operations for sourcing in China over the next three years. There is no such a view on India. Similarly, 54 per cent of Western European firms have a similar plan with China, and only 33 per cent of them would consider India, he said.

In manufacturing, 43 per cent of the companies worldwide said they were looking at Mexico, 41 per cent US and Canada and 38 per cent on China. There was no mention of India.

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