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Old 9th December 2011, 18:28   #1
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Default Volkswagen (globally) to source parts from India

- VW is planning to triple it's annual component sourcing from India (valued at over Rs. 2000 crores) in the next 3-5 years.

- The company will be sourcing about Rs. 432 crores of plastic parts annually.

- VW will also be investing ~Rs. 1728 crores over the next few years on tooling and vendor development.

Mahesh Kodumudi, Executive Director (Components Purchasing), Volkswagen Group India:

Quote:
“We are still seeing India as a very competitive sourcing base – there’s 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.”

Complete story - Volkswagen To Make India A Global Export Hub | MotorBeam - Indian Car Bike News & Reviews
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Old 9th December 2011, 19:28   #2
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Default re: Volkswagen (globally) to source parts from India

As I understand the article, it is mentioned that they intend to source plastic parts and other components thru' India. They don't intend to export vehicles from India.
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Old 10th December 2011, 08:55   #3
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Default re: Volkswagen (globally) to source parts from India

Its only parts sourcing from India and then exporting it to outside world where VW cars are assembled bringing the cost of components down thereby increasing the profit margins.

The India operations will also benefit from this move as the localization content will go up making it a possibility to bring the car prices down someday in future.
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Old 10th December 2011, 10:19   #4
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Default re: Volkswagen (globally) to source parts from India

Quote:
Originally Posted by RavenAvi View Post
- The company will be sourcing about Rs. 432 crores of plastic parts annually.
Happy to see VW sourcing from India but Why only plastics? Is India most cost effective on that front or is plastic manufacturing hazardous and it is better to do it here where the rules are less strict?
Can some expert enlighten?
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Old 10th December 2011, 21:32   #5
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Default Re: Volkswagen (globally) to source parts from India

This is great news for VW in India too since as mayank mentioned it will lead to higher localisation and cheaper costs of ownership of their cars . This also means that VW is all the more serious about India , its shows that they are ready to roll up their sleeves and work in vendor development which is great for the auto component industry. A parallel maybe drawn to the fact that Toyota sources parts worth around USD 1.5 Bn from India for its operations worldwide , these are components manufactured in their Bidadi factory (under Toyota Kirloskar Auto Parts and not Toyota Kirloskar Motors) as well as their vendors - thats what differentiates Toyota from Honda vis-a-vis the Indian market , they are much more serious about Indian market.


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Originally Posted by pacman2881 View Post
Happy to see VW sourcing from India but Why only plastics? Is India most cost effective on that front or is plastic manufacturing hazardous and it is better to do it here where the rules are less strict?
Can some expert enlighten?
Plastics parts are the easiest to source, so easiest to begin with , easiest to do vendor development with . Its not about hazardous manufacturing process , its about managing vendors who can conform to the VW quality standards.
The moment one goes to metal components , for a car these are critical components which involves sourcing of quality sheets , stamping process , casting process , etc , etc which are much more involved activities . VW is testing waters right now with plastics , given that they have been in India for only 4-5 years it will take a few years to expand the sourcing to non plastic components
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Old 11th December 2011, 00:42   #6
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Default Re: Volkswagen (globally) to source parts from India

Prior to reading this thread, i was under Impression that VW is sourcing the Plastic parts, like Dashboard, Door pads from abroad, as the quality & finishing they're having.
But if they're made in India, then its really a 'SALUTATION' to Indian Suppliers.
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Old 11th December 2011, 03:22   #7
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Default Re: Volkswagen (globally) to source parts from India

This is good for the Indian economy and GDP.
I'm surprised they're gonna develop Indian vendors while they have a massive base in China.

Do we have any BHPians who are VW vendors?
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