The Hindu Business Line : Volkswagen to use Indian vendors for global small car

Volkswagen, one of the recent entrants in the race to make compact cars in the country, plans to take advantage of the competence of its Indian small car vendors for global markets from where it would produce a similar model.

Volkswagen has finalised some suppliers and is in discussions with many of the firms for various parts that would go in making its small car, expected to hit the Indian roads by 2009-10.

Domestic auto part firms confirmed that the German car maker has indicated that it would be using the domestic supply base for its compact car to be produced in emerging markets such as Russia and Brazil.

Minda Industries Ltd, which has secured orders worth Rs 50 crore from Volkswagen, would be supplying lamps for the small car in India and Russia.

“We have got orders to supply in India and Russia,” said Mr Vivek Jindal, Executive Director, Minda Industries.

Sona Koyo Steering System’s Managing Director and CEO, Dr Surinder Kapur, said that many of the European auto companies are following a trend of consolidating their global supply base.

“We are in discussions with Volkswagen for a series of models. Many of the European automobile companies are talking to vendors for using the Indian supply base for other markets from where they plan to launch similar models,” he said.

When contacted, Volkswagen India Executive Director, Finance, Mr Ulrich Proske, admitted that the company was planning to use the Indian supply base if it finds them competent.

“We have a global supply base. We will see how competent the Indian suppliers are and depending on that we will use them for the same model that we could be producing in other markets or even different models,” Mr Proske told Business Line.

He declined to divulge further details on the markets where it plans to sell its India-based small car or the kind of sourcing it planned to do of components for its compact model to be produced elsewhere.

At the Auto Expo in January 2008, the company had revealed its plans to make an India-specific car for the global markets. The car that it would launch would be based on its small car Polo.

Volkswagen would produce its cars locally at Chakhan, near Pune.

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