Magna Automotive Rus says it is looking for reliable and flexible suppliers in the domestic market and uses a strict set of criteria to find what it is looking for.
The Canadian Tier 1 supplier is based in Nizhny Novgorod – also home to GAZ Group – and operates a strict evaluation procedure to vet potential new collaborators.
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“We work with all producers located near us in the Russian market,” Magna Rus head of purchasing, Andrey Dmitriev told delegates at this year’s Russian Automotive Forum (RAF) organised by Adam Smith Conferences in Moscow. “We are looking for reliable, competitive [flexible], suppliers.
“What is unacceptable? Agreement violation, bad quality, we don’t need that. Hidden cost, we don’t want that, because that will be eating our margins. Then unfair play, non-compliance, we don’t want these suppliers. Under no condition will we be cooperating with them.
“Suppliers go through checks, reliability, robustness, to honour their commitments. That gives you a holistic view of your supplier. Logistics, quality and purchasing, we do this evaluation.”
Magna has 17 Russian suppliers producing 104 parts and regularly conducts audits, while twice a year it hosts a components conference.
Localisation up to a certain level, was a key theme of the Automotive Forum in Moscow, with the high import cost of overseas components unable to be passed on to consumers due to the country’s extremely difficult economic conditions.
“We think to go to 70% localisation is quite a challenging thing to achieve,” PCMA Rus head of purchasing department, Alexander Smolyankin told delegates at the Hotel Ukraina in central Moscow. “More than 70% localisation, we find limited opportunities.”
