German car major Volkswagen AG aims to triple its annual component sourcing out of India to over €300 million euros over the next 3-5 years. The carmaker looks to double the number of component suppliers to over 200 to expand its range of spare parts made for global markets. Mahesh Kodumudi, executive director for components purchasing for Volkswagen group India, told Economic Times newspaper in India : “We are still seeing India as a very competitive sourcing base – there’s a cost advantage of at least 10-15% over Western Europe.
Volkswagen plans to invest close to €250 million over the next few years on tooling and vendor development in addition to a similar amount already deployed in India.
The German company today sources power train components, engine and transmission parts, metallic parts, sheet metal and a lot of small plastic parts. The company will be sourcing close to 50 million euros of plastic parts annually. This is part of an overall plan to source close to €1 billion worth components from India, both for domestic and global operations.