General Motors India Pvt Ltd will source components worth $1 billion (Rs 5,000 crore) for its overseas operations in the next two years from the chain of Indian suppliers it has developed, but it is yet to synergise with competitors to save costs, even as Ford India favours synergy with Peugeot.
GM India currently has 722 local suppliers whom it has awarded contracts worth nearly $500 million (Rs 2,500 crore). They include 200 suppliers who supply for the company’s Indian as well as global operations, Mr P. Balendran, Director and Vice-President, Corporate Affairs, GM India, told Business Line here on Friday. They are categorised as tier-one, two and three suppliers, who manufacture parts and spares as per GM’s specifications.
About GM India’s plans for light commercial vehicles (LCVs), he said these would be manufactured at the Halol plant in Gujarat. Multi-utility vehicles (MUVs) and LCVs capable of carrying up to two tonnes of cargo would be launched by December 2012.
Asked whether GM and Peugeot would synergise their activities in India, Mr Balendran said their global alliance will have a long-term positive effect on GM worldwide, particularly in Europe. “However, it is too soon to say how it will impact India and the Asia-Pacific region,” he said. So far, neither in India nor anywhere else have the two majors synergised to share suppliers or facilities.
In February, GM had announced to pick up a 7 per cent stake in PSA Peugeot Citroen in a global alliance targeting cuts worth about $2 billion in annual costs as they would share vehicle platforms, components and modules. Also, they would have a global purchasing joint venture for the sourcing of commodities, components, goods and services with combined annual purchasing volumes of about $125 billion, pooling of R&D for products they would market and sell separately.
On Thursday, Ford India Managing Director and CEO, Mr Michael Boneham, had said his company could look into such a synergy with Peugeot India, its neighbour at Sanand in Gujarat.