German firm to source 40 m euro auto parts

It's a shopping list worth 40 million euros and if Indian companies play it right, it’s theirs for the taking. One of the world’s ...

It’s a shopping list worth 40 million euros and if Indian companies play it right, it’s theirs for the taking. One of the world’s leading manufacturers of high-end diesel engines, MTU Friedrichshafen, is looking to India as a high potential source for auto-component supplies.

A top-level Global Sourcing team, including Erik Manning, Director, Materials Management of MTU, and Ralph-Michael Schmidt, Director, Quality Management, MTU, is on a four-city — Pune, Chennai, Coimbatore and New Delhi — week-long to talk to suppliers and visit plants. ‘‘Our overall spend in forgings, pumps, valves, castings and fasteners amount to 79 million euros, and if everything goes well, we are looking to source about 40 million euros worth of supplies from India over the next five years,’’ Manning told The Indian Express.

It’s a case of simple economics. ‘‘We are looking to India for two reasons. Indian suppliers will help us reduce our material costs. We can slowly shift our sourcing in Europe, which now comprises 80 pc of the total, to India,’’ adds Schmidt. Among the suppliers the team is meeting are Bharat Forge, Sundram Fasteners, Mforge, Ashok Iron Works, Lakshmi Forging to name a handful. The auto components MTU is looking to source are for the 2000/4000 series diesel engines to be used in generator sets, construction equipment, railways and marine applications (from yachts to work boats).

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MTU, together with the off-highway segments of Detroit Diesel Corporation and DaimlerChrysler’s commercial vehicles division, forms the business unit of DaimlerChrysler Off-Highway.

Globally, MTU has a strong presence in Europe, Asia and NAFTA with one quarter of the sales (worth 1.7 billion euros) of the MTU Group coming from the Asian region, whose hub is Singapore. ‘‘If we are satisfied, we will start sourcing pilot parts from selected suppliers by mid-May,’’ says Manning.

So, will MTU restrict itself to sourcing only forgings and the like? After all, it’s core competence is supplying top-end engines for army tanks and navy ships. ‘‘In India, we supply engines to the Arjun battle tank and a few locomotives of railways run on MTU engines. We have no plans yet to source these components from India,’’ Schmidt said.