Indian exports to DaimlerChrysler accounted for 8% of the total Euro 800 million in fiscal year ’02-03, according to the Economic Times of India.
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Noshir Desai, DC’s divisional manager, global procurement and supply, reportedly said automotive component exports from India to DCAG globally were E63 million in calendar year ’02 and, on an annualised basis, would amount to 8% of the country’s total auto component exports.
He admitted that this was under 1% of DC’s automotive group’s purchases of E100 billion.
“Over the next two to three years, India should be able to contribute 1% (E1 billion through our global sourcing,” he said. In Asia but excluding Japan, India is one of the biggest exporters to DC, the closest other country being the Philippines, where DCAG owns electronics company Tenic.
A DC India spokesman said that, while Malaysia (aluminium castings and rubber products) and Thailand (tooling, jigs and fixtures) have very strong vendor bases, India is the only one with competitive advantage in IT and engineering services.
He added that the increasing pressure of cost reduction is forcing more and more OEMs to look for lower cost centres and added that India should look to her competitive advantage and leverage those.
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By GlobalData“Global OEMs are facing pressure to reduce costs. This is the best thing that could have happened to component manufacturers in India. There are incredibly high figures on the cost cutting list and the potential is huge. This has opened up a huge market and Indian vendors are truly competitive on price and quality,” he said.
The Economic Times of India said DCIL began by sourcing local content in 1997 but catering only to its Indian arm provided limited opportunities. Hence it quickly moved to global sourcing and today 28 Indian companies export to DC.
“To make sense, exports must offer a minimum cost saving of 10-15%. In the IT and engineering services area, cost savings are as high as 40-45%,” a spokesman said, adding that a Pune-based vendor supplies the entire wiring harness for the existing C Class to the German plant, amounting to E7-8 million annually.
Indicating the rising trend, the spokesman reportedly said: “We are scouting for more vendors. This is a high growth area and wherever labour costs are over 35%, there will be a trend to move out of high labour cost areas like Germany.” He added that they want to increase the share of existing vendors, to provide them economic volumes, the report said.
