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French auto major Groupe PSA, which is preparing to launch its passenger vehicles in India next year, seeks to grow its auto parts sourcing from India many times in the coming years.
With the setting up of a new sourcing hub operations in India and expansion of its supplier base both for the supply of parts to local manufacturing and global production, the company’s turnover of parts exports is expected to grow significantly in the coming years from €25 million in 2018.
“In 2018, we purchased €42 billion worth of parts for the group and India’s share was just €25 million. So there are immense opportunities for the Indian suppliers to access the huge sourcing plans of PSA,” ‘Michelle Wen, Executive Vice-President, Global Purchasing and Supplier Quality, Groupe PSA, told BusinessLine .
As part of its recent announcement on setting up of purchasing operations in India, there will be two teams for the purchase of parts. One will be based in Chennai for vehicle parts needed for manufacturing and another team will be based in Hosur for international components sourcing.
“The new purchasing hub in India will be the central point for suppliers to contact us for parts for India as well as for the world,” she said.
Localisation plans
Explaining on localisation plans, components for powertrains and gearboxes could be localised faster as numerous suppliers have already come onboard for the same. Works such as forgings and stampings will be localised after that. “I think India has a strong supplier base for forgings and related parts,” she said.
The group has been sourcing mechanical parts, steel wheels and plastic parts from India.
Pact with CK Birla Group
But now the company in joint venture with CK Birla Group has set up a new factory for the manufacture of engines and gear boxes to support both its local manufacturing and global factories.
“With our current plans in India, we have already awarded 120 suppliers for our local manufacturing programme,” Thomas Delepoulle, Vice-President – Purchasing Strategy, Groupe PSA, said.
Meanwhile, the group has kickstarted its suppliers’ summit in India with its first event in Chennai. More than 500 India suppliers attended the summit to explore and seek opportunities for supply of their parts to PSA group.
PSA’s leadership team will also visit various auto parts facilities as part of its Indian plans.
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