German supplier Robert Bosch, attempting to curtail production costs, has relocated manufacture of certain automotive components from European plants to its Indian subsidiary Motor Industries Company Limited (MICO).
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Bosch has transferred single cylinder pumps from the Czech Republic, multi-pumps from Austria, and KCA injectors from France to India to be produced by MICO’s Bangalore plant.
Further injectors and nozzles will move production base to MICO’s Nashik facility, regulators formerly manufactured in UK will now be made in the Nagnathapura plant and Cylinder VE distributor pumps have been shifted from Germany to the Jaipur plant.
MICO will undertake global manufacture of these components for worldwide supplies. Investments in plant, augmentation in manpower is underway at all four MICO plants. 180 jobs at different levels have been generated and export turnover of INR600million (€11 million) earned from this shift at the end of 2004.
MICO’s exports are projected to grow 30% through 2006 while its contribution to total sales is expected to increase from 15% currently to near 20% by 2006. This strategy is gaining pace especially amongst suppliers located heavily in developed nations but feeling pressure on profit margins due primarily to high labour costs. Low cost locations like India are increasingly delivering comparable quality for less wages.
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By GlobalDataDeepesh Rathore / Tilak Swarup
