FCA Serbia says it has "completely changed" its purchasing division to hone in on quality rather than simply cost in a reorganisation drive. And PSA is targeting 95% local sourcing.

Addressing this week's Central and Eastern European Forum in Prague, the automaker revealed it had revamped the direction of its global EUR68bn purchasing division after its original inception in 2008.

"The idea was to be more aligned with the R&D organisation – communication was very complex when we were working separately," said FCA Purchasing Department direct materials manager, Tatjana Jokic.

"[There are] some projects for the Serbian plant and some projects in central and eastern Europe. This region has many opportunities so we are trying to [find] new suppliers which could bring us some savings and better quality.

"Changing the approach to quality first, we are ensuring to choose the highest quality components. This new approach is working – it is across the group." 

FCA purchasing in Serbia employs around 2,000 staff and is divided into global and regional divisions with responsibility for body, interior, chassis and engines among other areas. The automaker has purchasing departments in Italy, Poland, Serbia and France as well as two in North America, three in South America and three in the APAC region.

The importance of central and eastern Europe was evident through the number of purchasing managers at the event in Prague with the clear advantage of the major availability of labour at significantly reduced costs driving many OEMs, such as PSA Groupe and myriad suppliers, to base themselves in the region.

"Today we have 2,500 suppliers – our sourcing is 67% in this area [and] our target is to be at 95%," said PSA Groupe Slovakia director of purchasing Alev Onur. "We would like to optimise eastern France sourcing with central and eastern European suppliers – all that with the total landed cost vision.

"The nearer [suppliers are to] Trvana [PSA Slovakia plant], the [better] for performance. We have a new [engine] product – it is around 300,000 components – we are looking for new suppliers [of] these parts."