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Daimler to outsource $100 mn auto parts from India

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August 10, 2004 14:36 IST

German carmaker DaimlerChrysler will outsource from India IT services and auto components valued at over $100 million this year, a top company official said.

"Daimler plants in Europe source IT services and auto components directly from suppliers in India and nearly 80 per cent is done from here in Bangalore," DaimlerChrysler India CEO and Managing Director Hans-Michael Huber told reporters here at the launch of the new Mercedes Benz C-Class range.

He said about one-thirds of the $100 million outsourcing by the global plants which produce Benz cars is software services, with the rest being auto parts.

Last year, the firm outsourced IT and components valued at $85 million from India.

Presently, Huber said, most of the auto kits in 'S' vehicles had components produced in Europe, adding: "This situation can change in the next five to six years."

The company is looking at sourcing components from China, India, East Europe and Latin America.

"The competition for Indian entrepreneurs will not be the high quality low cost production here with the high quality high cost production in Germany or Europe. India has high potential but you will have heavy competition from all the firms in low cost markets like South China, Mexico or Hungary," he said.
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