Overseas OEMs Target India, China For Sourcing

Chennai, September 25: | Updated: Sep 26 2002, 05:30am hrs
Original equipment manufacturers from the US and Germany are looking at outsourcing auto components from India and China.

The manufacturers in these countries are facing cost pressures and looking at lower cost alternatives, said Mr Surersh Krishna, chairman and managing director, Sundram Fasteners Ltd (SFL).

There is hesitancy to outsource from a developing country but the cost compulsions will drive them to buy from India and

China, Mr Krishna said at the companys annual shareholders meet held here on Wednesday.

China has done a great job in terms of infrastructure, which is very impressive,he added.

The company expects to maintain its performance during the fiscal, at the same levels as last year.

The two-wheeler industry has been showing good growth but the tractor sales have been sluggish, the managing director noted.

Meanwhile, SFL has indigenised the entire raw material requirements.

It is a very creditable achievement, as we consume about 45,000 tonnes of material a year. We have worked closely with suppliers for the localisation process, Mr Krishna explained.

SFL uses a large of amount of specialised raw materials like speciality steels etc.

The company has set up a project in Pondicherry for the manufacture of small forgings, which will cater to the automotive industry, mainly two wheelers.

The initial investment will be Rs 16 crore and Rs 7 crore has been spent upto March 2002.