Our Bureau

Chennai, Aug. 29

A NUMBER of UK-based automobile companies are looking at India for more partnerships with domestic firms.

One of the key reasons driving this is that auto companies in the UK are lowering the prices of their products to gain more volume. For this, they are looking at low-cost countries like India to outsource materials, according to Mr Les Parfitt, Manager, International, The Society of Motor Manufacturers and Traders Ltd, UK's leading automotive trade association.

Leading a nine-member automotive mission to India, Mr Parfitt told presspersons that the UK companies started the cost reduction exercise last year, and this year they would formalise the outsourcing plan from India.

The delegation consists of companies ranging from two-employee firms to multinationals. The delegation, which was in Chennai on Monday, will also visit Delhi, he said.

India and China are low-cost destinations and it will be difficult for the UK companies to sell volume products in these countries. On the other hand, the UK firms can supply to India high technology products for the local automotive industry, he said.

According to Mr V. Eshwaran, Senior Trade and Investment Adviser, UK Trade and Investment, bilateral trade between India and UK in the automotive sector increased to about £30 million in 2003-04 compared to £20 million a year before.

For fiscal 2004-05, the number is yet to be compiled, and is likely to remain at around £30 million since four or five key projects did not materialise during the year.

As per the five-year plan framed in 2001, the target for the UK trade and investment in the automotive sector was to have around 50 partnerships between the two countries. So far, around 30 partnerships have materialised, and hoped to reach 50 by the fiscal end, he said.

(This article was published in the Business Line print edition dated August 30, 2005)
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