PCMA Rus says it aims to improve its localisation rate by 10% next year as it looks to fend off the impact of currency wobbles.
The current political unrest between Russia, Ukraine and the West, is fuelling Forex uncertainty with the rouble coming under considerable pressure since Moscow’s de facto annexation of the peninsular.
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That – coupled with an expected inflation rate of 10% and a GDP slowdown has forced the issue of domestic component supply to the forefront of many minds.
“The only [response] for us is to increase our localisation,” said PCMA Rus general manager, Jean-Christophe Marchal, at last week’s Russian Automotive Forum organised by Adam Smith Conferences in Moscow.
“It should provide defence against Forex risks. We have parts coming from all over the world. My logistics costs are very high and localising parts in Russia will help us to reduce cost.
“It will make easier, strict quality control because suppliers will be closer to the plant.”
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By GlobalDataMarchal added PCMA Rus – a joint venture between PSA Peugeot Citroen – 70% – and Mitsubishi – 30% – currently had 34% localisation but this was not sufficient.
“We would launch an appeal to all suppliers to go deeper in localising parts,” he said. “Our target is to improve our localisation rate of [by] at least 10% by the end of 2015.
“We would like to localise car batteries, light alloy wheels and plastic elements. PCMA Rus is fully open to work with many partners on localisation of components.
“I think now we have to go deeper and find a way to work with Russian suppliers – there is no reason for us not to be able do that. We have to have a pragmatic approach.”
