Our Bureau

New Delhi, July 7

THE much-publicised corruption-related controversy involving top executives of German automaker Volkswagen AG seems to be have hit the company's ambitious component sourcing plans for India.

According to sources, these plans were independent of the company's intention to set up ancillary units at its proposed facility in Vizag, which too has been put on the backburner following news of the scandal.

Officials from Volkswagen's global outsourcing team had visited the country last month and held discussions with several local auto component companies located across the country for the sourcing of components. At a seminar in Goa, the Volkswagen team had also made presentations to several officials from the domestic auto component industry regarding their plans and specifications. However, sources said that the visits have not yet led to placements of any orders from the company.

Recent reports in German newspapers have suggested that top executives at the automaker were operating front companies, that bid for lucrative Volkswagen contracts, across several countries including India.

(This article was published in the Business Line print edition dated July 8, 2005)
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