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Policies help India become component hub for auto majors

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New Delhi, Apr 11 (UNI) The government policy of export obligations on the auto majors like Daimler-Chrysler, Ford and General Motors at the time of their entry into the country has paid rich dividends as it prompted them to make India a sourcing base for components for their world-wide operations.

''Indian auto component exports increased from 375 million dollar in 2002-03 to more than one billion US dollar in 2004,'' a report by Research and Information System for Developing Countries (RIS) has said.

About 15 of the top auto majors have already set up international purchasing offices in India.

This has helped the country's auto component manufacturers develop their links with world's largest firms of automobiles that could be of long term interest.

Ford has taken up a programme to source components from India as well as using it as an export base for Ikon, a car based on 'Fiesta' platform, to South Asian, African and Latin markets.

''Initally, Ford was sceptical about this but Ford UK, to which the Indian samples were exported, found their quality to be superior than that of their conventional sourcing bases,'' the report said.

General Motors India (GMI) Ltd is also pursuing partnership with Indian suppliers for world-wide sourcing of components for GM overseas units from India.

The local unit of Daimler-Chrysler has developed more than 20 joint ventures for manufacture and export of auto components to its plants in Germany.

Indian suppliers are made to follow its stringent quality guidelines and standards. By early 2002, cumulative exports of 260 million had been achieved.

In May 2003, CEOs of 30 Indian auto component producers were invited by Navitsar, Caterpillar, Ford and Delphi to visit the US to discuss global outsourcing possibilities.

UNI PV/PC RL DS1505

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