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GM Motors to hike procurement from SMEs

The slowdown in Indian auto markets notwithstanding, world’s second largest auto maker General Motors, is betting big on India. Its Indian arm has decided to source as much as 95 per cent of componen

The slowdown in Indian auto markets notwithstanding, world’s second largest auto maker General Motors, is betting big on India.  Its Indian arm has decided to source as much as 95 per cent of components from local manufacturers for some of its newer models while doubling its production from 1,50,000 vehicles now to 300,000 vehicles by 2014.    

Speaking at the FISME-SMERA ‘Profit from Knowledge Series- Auto Sector’  held in Faridabad, Vice President,  Global Purchasing and Supply Chain of General Motors India, Ashwani Muppasani said, “GM is focusing on domestic component manufacturers particularly SMEs and the percentage of locally sourced parts and components in new vehicles can be as high as 95 per cent.” However, the would-be suppliers would have to confirm to global quality and performance standards and be TS certified, he cautioned. 

Speaking during the occasion, former Chairman and Managing Director of Sumitomo Corporation of India, Keiji Nakajima, who has spent over 30 years in India, mentioned that the real source of technologies in Japan is not large corporations but SMEs. Unfortunately, Japanese SMEs did not know about India’s potential and suffer from negative perceptions about India.  According to him, majority of these Japanese SMEs have been instrumental in transfer of technology from Japan to their Chinese counterparts.

While the positive medium and long term outlook for demand in the Indian auto sector was undisputed, there were concerns about rising imports of auto parts and components. A FISME research brief prepared for the occasion showed the rising trend of imports of auto components from ASEAN countries. Secretary General FISME, Anil Bhardwaj opined that impact of India-ASEAN FTA needs to be continuously monitored.

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