The Hindu Business Line : Global auto majors accelerate pace of sourcing components from India

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Global auto majors accelerate pace of sourcing components from India

While exports to Europe would give us a cost advantage of 25-30 per cent, in case of Latin America, it is about 10 per cent, says Fiat India.

Priyanka Vyas

New Delhi, Dec. 11 The cost pressures building up for global auto companies during the current economic slowdown could well be an advantage for India. Those who have been using the country as their component sourcing base say that they will be accelerating the pace of sourcing from here.

“The slowdown is an opportunity for us to strategise our sourcing plans from India. Earlier, we were to supply to Europe from India. But now we are also evaluating the option of exporting to our plants in Brazil and Argentina. This would help us meet our sourcing target of €50 million by 2010,” said Mr Neeraj Hans, Purchasing Head, Fiat India.

“While exports to Europe would give us a cost advantage of 25-30 per cent, in case of Latin America, it is about 10 per cent. It is still good enough considering the current circumstances,” he added.

BMW also cited a renewed interest in sourcing from here. “In the present scenario, there is an increasing interest and the need to optimise cost. The toughening environment in the automotive industry actually emphasises the demand for a well established international purchasing network in order to optimise the sourcing activities and utilise markets, which offer cost advantages,” said Mr Thomas Thym, Head, International Purchasing Office, BMW India.

French auto maker Renault, which has a series of projects in India, also confirmed that 40 of its domestic suppliers continued to meet their global sourcing requirement from here. Renault with Nissan is aiming to source €300 million worth of components.

“We are working very closely with our supplier partners to review our requirements over the next two quarters. Our sourcing teams based in Chennai and Pune are continuing to work with our current suppliers. They are also evaluating suppliers for different components for our global requirements,” said Renault India spokesperson.