German auto major Volkswagen has started sourcing auto components for its European plants. Going forward India would become one of the major sources for components for our global units, said Jörg Müller, President and Managing Director of Volkswagen Group India.
Meanwhile the company had set a target to capture 8-10 per cent of market share, passenger car segment, in India by 2014, with series of launch and by doubling its dealers in the country.
Speaking to select media representatives in Chennai on Sunday Müller said that the company has started sourcing components from India to its Russian plant. He declined to disclose the component which was sourced from India.
However he said the company is looking at sourcing light systems, plastic related items and metals for its European plants.
According to industry experts components made in India and China are 10-15 per cent cheaper than in Europe and the US . This had attracted auto majors including Volkswagen to India, which could be a major beneficiary of increased sourcing in the auto component industry, which is likely to flow contracts worth $700 billion to low cost countries by 2015.
Some of the multinationals made India a hub for components are Toyota, GM, Fiat, Volkswagen, Renault and Daimler.
According to reports, Italian auto major, Fiat Group Purchasing plans to buy auto parts worth $1 billion (around Rs 4,900 crore) from India by 2010 for its European and other operations.
General Motors had said it is planned to source components worth $1 billion from India, but the company yet to set a time limit.
Similarly, Ford said that is plans to import components worth $500 million from India for its world-wide operations.
Japanese auto major Nissan said that it would source auto components worth $40 million from India by 2011-12. South Korean auto major Hyundai Motor Company is looking at increasing sourcing components from India for its global operations.
It was also reported that Germany luxury car and biker maker BMW (Rolls Royce's parent company) has firmed up its plan to increase component sourcing from India for its global operations. Currently, the company source components like horns for cars and handle bars and die cast from India.
Meanwhile, speaking about Volkswagen operations in India, Müller said the company had set a target to capture 8-10 per cent of the market share in the country by 2014.
"We sold 1,800 units during Jan-August this year," Müller said. The company has 15 different models and lined up five more launches including hatchback and sedan versions of Polo next year from its Rs 3,800-crore plant in Pune, which was inaugurated on March 31, 2009 .
The plant will be building the Skoda Fabia compact car. Production of a hatchback version of the Volkswagen Polo, compact car specially developed for the Indian market will be added from 2010.
Localisation in Polo would be 50 per cent to start with, going forward it will be increased to 75 per cent, said Müller.
To increase the penetration the company is planning to increase number of dealers to 200 by 2012 from 120, he added.
With a total financial commitment in India amounting to 580 million euros (around Rs 3,800 crore), the Pune plant represents the largest investment to date by a German company in the country. The facility has a maximum annual production capacity of 110,000 vehicles destined for delivery to the Indian market, he added.
Volkswagen plans to employ some 2,500 people at the Pune plant by the end of 2010, he added.
