Volkswagen to hold vendors' meet

German car major, Volkswagen's India project head Helmuth Schuster is coming next week to Andhra Pradesh to hold a meeting with local vendors to finalise ancillary units for the proposed manufacturing facility at Visakhapatnam.

Sources close to the development said that a list of nearly 50 ancillary units operating in the state has been submitted to the Volkswagen officials and the arrangements for the impending meeting are in progress.

According to officials, the meeting has been tentatively fixed after May 23, 2005.

"But there is some ambiguity with regard to the venue. While some want to hold it in Vizag, some others want it in Hyderabad," an industry department official told Business Standard.

Though it was originally proposed to set up all the captive ancillary units in the proposed ancillary park at Vizag, sources said that some sections in the industry have now started suggesting to the government to consider Hyderabad as the Volkswagen's second ancillary base.

This is because most of the existing automobile ancillary units are located in and around Hyderabad.

Things have started rolling at a brisk pace following the recent meeting between the state government representatives and the Volkswagen management in Germany during the first week of this month.

Soon after returning from Germany, the government representatives stated that the memorandum of understanding for the proposed car manufacturing plant has been finalised and the project will come to a final shape in the next 45 days.

Vendors meeting is the first crucial step being undertaken by Volkswagen after the recent meeting in Germany.

According to sources, Schuster and his team will organise similar vendor meetings at Gurgaon and other vendor bases in the country.

Ancillaries in the state have made a mark of their own across the country with regard to engine parts, brakes and valves and supply to all the major automobile manufacturers in the country.

With the Volkswagen management deciding to go for maximum ancillarisation for the Vizag project, the company may look for other vendor bases in Gurgaon, Tamil Nadu and Mumbai-Pune stretch in Maharashtra to meet its requirements.