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Suzuki plans global purchase office here
AFTER decades-long presence in India through Maruti Udyog, Suzuki Motor Corporation is setting up a worldwide purchase office in India. It thus joins a large and growing list of multinational corporations setting up such purchase offices, variously called international purchase offices {IPOs) or worldwide purchasing (WWP) offices in India targeting the multi-billion dollar opportunity of out-sourced production.
MUL held a meeting with some of its Indian vendors in Kuala Lumpur early May, for these manufacturers to be part of Suzuki’s global sourcing programme. “Suzuki has just begun global sourcing and some Indian vendors could be part of it,” MUL managing director Jagdish Khattar had said soon after the Kuala Lumpur meeting. The Manesar plant for the manufacture of diesel engines, set to begin from July, is mainly for Suzuki’s European line-up, since it lacked a diesel offering in that market.
Analysts feel Indian pricing will initially allow Suzuki to source between 10-15% of its global car model’s components from Indian manufacturers, rising gradually to asmuchas35%.
US-based engine manufacturer Cummins has an IPO in Pune and is increasing its sourcing. It plans to source engine components worth $600 million this year, a threefold jump from the $200 million worth it sourced. Luxury car maker DaimlerChrysIer India (DCIL) sourcing has been growing at a compounded annual growth rate of 22%. “For the past two years, we have been averaging a 22% growth, annually. It is a very strong programme and we are using the India advantage,” DCIL director, finance and corporate, Suhas Kadlaskar said.
BMW will set up its IPO in Delhi, Seco Tools India, a subsidiary of Swedish metal cutting tools manufacturer Seco Tools, has been re-locating global product lines consistently over the past few years. Now, it has located its Asia-Pacific global sourcing office in Pune, to initially “source those products which are under cost pressure in Europe,” Seco Too is India MD Thierry Cros said. This is the commodity sourcing and it is soon to be followed by a global sourcing centre for Information Technology. This too, will be located in Pune, Mr Cros said.
Aero Engine Company Pratt and Whitney has also been scouting for suppliers. Engine and drive train components manufacturer Borg Warner is also reported to be sourcing from India, moving production to India from its plant in Monaco. Honeywell Turbochargers India expects to annually source $ 100 million worth of components for its global operations from India over the next few years, Honeywell Turbochargers MD Sanjay Sondhi said. This will primarily be mechanical and machined parts.
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