Volkswagen to source more parts from India for global operations Volkswagen AG, the German luxury car manufacturer, is planning to source more spare parts from India for its global operations. The company aims to triple its annual sourcing of components to over 300 million Euros from India in the next 3-5 years. The luxury car maker also plans to double its number of input suppliers to 200. This decision of Volkswagen AG will probably help the company to expand its range of components required for the global market. Along with obtaining economical components, this will also help Volkswagen AG to increase localisation to over 90 per cent for its small car UP!. This car is expected to launch in the Indian market in a couple of years. Increased localisation will help the company to competitively price its small car and take lead over companies like Hyundai India and Maruti Suzuki. Moreover, the company will also safeguard itself against the fluctuations in currency. Currently, the company sources components like power train engine and transmission, sheet metal, metallic parts and huge amount small plastic parts. Volkswagen AG has an annual sourcing of plastic parts worth 50 million Euros which amounts to Rs. 432 crore. The total sourcing of components from India amounts to 1 billion for both- global and domestic activities. In comparison, Volkswagen AG has an annual sourcing of components worth 70-80 billion from the rest of world. The company has planned to invest around Rs. 1728 crore over the next couple of years in the Indian automotive industry. Mahesh Kodumudi, Executive Director for Components Purchasing for Volkswagen Group India, told Economic Times that We are still seeing India as a very competitive sourcing base - theres a cost advantage of at least 10-15% over Western Europe. And having worked with Indian vendors over the past few years, their capabilities too have matured and we do see them playing a bigger role.
Posted on: Wed, 04 Jun 2014 02:44:18 +0000
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