BS reported that TAT Motor’s Jaguar Land Rover is in talks with Indian vendors to supply auto parts, which would be cheaper compared to those manufactured in the West.

As per report, a clutch of domestic auto parts manufacturing companies, which supply to TATA Motors, will see an additional flow of demand from Jaguar Land Rover as the latter two brands seek to maintain their profitability.

The purchasing office of the two brands, based in Pune, has sounded out a more aggressive push towards sourcing of parts from local vendors.

According to vendor sources, the two brands have had discussions with multiple component manufacturers and have asked them to ramp up supplies.

This hints at a rise in momentum in sourcing activity, especially after the new assembly plant for Land Rover at Pune becomes operational later this year.

Although senior TATA Motors officials have not divulged the details of sourcing from India alone, the overall component sourcing done from low cost countries is 20% with India commanding a lion's share.

TATA Motors is aiming to increase the component volumes from India and take it to 30% levels in the coming period. This will reduce the cost of the product significantly since Indian auto parts are 30 to 40% cheaper than those manufactured in the West.

The decision to raise imports of auto parts from India is perhaps linked to the idea of increasing production at the manufacturing plants in the UK to 300,000 units per annum or beyond from 270,000 units at present.

(Sourced from BS)