Staff Reporter | 03 May, 2008
With Renault-Nissan expected to source Euro 300 million (approximately Rs 1,890 crore) worth of auto components from the domestic market for its passenger car business in Europe, over the next two years, small and medium enterprises (SMEs) in the sector may stand to benefit.

Although no concrete confirmation came from the company's management as yet, Chief Executive Officer, Carlos Ghosn's frequent references to India's low-cost engineering and designing capability can be an indication enough in this direction.

"We are working with 38 suppliers here. We have already started sourcing some components since last year. And in the next two years, we would be sourcing components worth Euro 300 million from India," said a Renault-India spokesperson in New Delhi.

The spokesperson said that the company was looking at sourcing from India even before Renault-Nissan would begin production in the country by 2010.

"Once the production begins at our facility here, a lot of supplies would essentially go in meeting domestic requirements. We would be sourcing over the next two years to align the products according to our global requirement," he said.

Last year, the joint purchasing team sourced auto parts for Euro 100 million from the domestic market. Global automobile companies such as General Motors, Volvo, Mercedes and BMW are already sourcing components from India for their overseas units.

GM has announced a target of $1 billion components by 2010 and Volvo procured components of roughly Euro 90 million annually.