India’s largest carmaker Maruti Udyog is planning a global procurement programme to benefit from the most competitive suppliers irrespective of national borders.
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“We are going in for world-wide procurement or WWP, which means sourcing components from the best and cheapest supplier globally,” said managing director Jagdish Khattar.
He added that Indian import tariffs will come down so local car manufacturers will be able to build a vendor base from the most competitive suppliers world-wide. Indian vendors will also be able to compete more comprehensively on a global scale. As well as sourcing from Japan, Maruti already buys dies from Taiwan and Korea.
It is a long step for Maruti, which traditionally has held close relations with its 12 associate vendors and other non-associate vendors. Maruti holds stakes ranging from 7% to 44% in its associates and also accounts for an average of 70% of their sales. These Maruti joint ventures have technology partners derived mostly from the relationships major shareholder Suzuki has with its vendors in Japan.
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