Chennai, Aug 20: Global auto majors have begun to act tough with their local vendor base. Quality issues have come to fore and soured the relations between them and domestic auto components vendors.

The honeymoon between the two is well and truly over. The biggies who have set shop here are now demanding quality performance from the domestic auto ancillary industry.

General Motors India Ltd (GMI), has discarded over five of its vendors for the Opel Astra on quality grounds. Informed sources said that as much as ten companies, probably more could figure in General Motors India's (GMI) final `drop-list'. Mahindra Ford India Ltd (MFIL), has also had to tackle occasional `below standard' supplies from some of it vendors for Escort.

Though it has not resorted to discarding vendors, it has had to freeze purchases from such suppliers until quality issues were resolved.

"We took a lot of care in selecting our vendors and our supplier technical assistance group (Stag) is working closely with those that have quality problems," a company official said. Commenting on the reasons for eliminating some vendors, a top General Motors India official said: "Some of them failed to live up to our basic standards. They did not even have a clear understanding of the product specifications and repeated efforts to help them upgrade have failed." He however refused to reveal the names of the companies that have been discarded.

Vendor elimination is something quite new to the Indian ancillary industry. "Unless supplies are consistently bad and vendors shift their focus to other product segments, they are not discarded. As far as my memory goes, we have not had to drop any vendors," a top Hindustan Motors official said.

On the brighter side, most auto majors are satisfied with the overall standard of the Indian ancillary industry. In fact GMI has shortlisted three of its vendors as candidates for supply to General Motors Corporation, based on their exceptional performance. These companies manufacturing metal formings, stampings, castings and mouldings have been put on the `bid list', on General Motors `global supplier pipeline'.

"If selected, these companies could export components worth $1 million to $10 million every year to GM," said GMI executive director (purchase and supply) Sudhir Rao.

Speaking to The Financial Express, William J Kraatz, Director-Supplier Development of General Motors Corporation's Asia-Pacific division said: "Obviously the vendor base in this region is not as mature as the United States of America or Europe. We recognise this and are working closely with them for improving quality standards."

This is reflected in General Motors' stand on the QS 9000 for vendors from the Asia-Pacific region. While vendors from USA, Europe and Latin America have to get this certification before the end of the current year, those from the Asia Pacific region have been given time till the end of the year 1999.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.