MUMBAI, INDIA (Nov. 28, 1 p.m. ET) — Volkswagen AG is fast emerging as a major global OEM that sources plastic components in India.
“We would likely source around 50 million euros ($66.7 million) worth of plastic components for our production facility in India,” said Mahesh Kodumudi, executive director for components purchasing for Volkswagen Group India. He was interviewed at the recent Automotive Plastics 2011 conference in Mumbai.
He further said, “The volume would grow with growth in production in future as demand for the VW models grow.”
VW is sourcing all kinds of plastic components for its plant in Chakan, India, including instrument panels, carpet, bumpers, and door trim panels. The company's Polo, Fabia, Vento and Rapid nameplates have a high degree of local content.
“Vento has the highest plastic content among the VW range available in India,” Kodumudi said.
On average, VW cars in India carry around 130-140 kg. of plastic components in vehicles that in a car that weighs around 1100 kg., compared to other cars that carry around 110 kg.
When asked the plastic content would further grow up in the years to come, Kodumudi said, “We have no plans to further hike the plastic content in our range in India, not in near future. We would remain [at] the current levels.”
VW Group has invested about 250 million euros ($333.7 million) on tooling and vendor development, he said. Finding a vendor base that could meet its high technical standard took some time.
“Initially, suppliers were not understanding our technical requirements and meeting our technical specifications was a huge challenge. We do not intend to dilute our brand image. Moreover, we want to manufacture cars in India for export market also and we do not have to make two different cars,” Kodumudi said.
Currently, VW has 115 local vendors, which will likely to grow to 150-160 once it starts manufacturing 250,000 to 300,000 units in India.
“Our next step is deeper localization that includes getting polymers and compounds from Indian vendors. Polypropylene is a top target,” he said.
Many global suppliers have set up production facilities in India, including Visteon and International Automotive Components Group, but they are not using locally made compounds.
Meanwhile, VW's global sourcing is rising consistently.
“We have been sourcing around 90 million euros ($120.1 million) worth of components from our Indian vendor base for VW's operations worldwide. The sourcing would likely to go up 300 million euros ($400 million) in four to five years,” Kodumudi said.
VW is targeting a 10 percent share of the Indian car market within five years.