Volkswagen Group’s parts buyers attended a Korea Trade-Investment Promotion Agency’s autoparts export consultation session in Seoul today.
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Officials from 25 local partsmakers including Mando and LG Hausys met with Volkswagen buyers for five types of components including electrical and interior components, KOTRA said.
KOTRA officials told the Korea Herald that Volkswagen Group sending buyers overseas instead of inviting parts makers to its headquarters in Germany was an exceptional move thought to be part of the carmaker’s cost cutting strategies.
According to industry sources, Volkswagen’s parts purchases last year amounted to EUR74.5bn (US$110.9 billion), of which 52% were bought from sources outside of Germany.
The KOTRA also said that the change in Volkswagen’s purchasing process could also indicate that the German giant is looking to use more Korean-made parts.
On Monday it was announced that LG Electronics would supply car audio systems worth about US$370m to Volkswagen. Under the seven-year deal starting 2012, LG will become one of the largest suppliers of audio systems for VW, Seat and Skoda brands, LG said.
Volkswagen, which plans to double the proportion of its output accounted for by facilities in Asia by 2018, is said to prefer Korean-made parts as they are of better quality than Chinese products but cheaper than Japanese parts, the Korea Herlad noted.
