Business Line reported that TATA Motors is looking to source more auto components from Korea that are both good in quality and more cost effective than those imported from the US, Europe and Japan.
Mr SB Borwankar executive director of TATA Motors said that to offset the rising labor cost in Korea, the Indian auto major is also actively encouraging Korean auto parts makers to set up base in India, either independently or through JV with local partners.
Mr Borwankar at the Korean Auto Parts Plaza said that a trade show being held in Pune for the second consecutive year. Nearly 20 Korean auto parts companies are participating in the 2 day show.
During FY'13, the company expects its Korean imports to be valued at USD 85 million against USD 70 million during FY'12.
He said that "These parts are around 10% to 15% cheaper than Japanese components of the same quality," adding that while parts sourced from China were cheaper, the quality is nowhere so good.
Currently, TATA Motors' total imports stand at INR 2,000 crore with China being the number one supplier followed by Korea.
He added that "We want to increase imports from Korea and other South East Asian countries like Vietnam, Thailand and Indonesia by 20% to 25% over the next 2 to 3 years."
Among the Korean companies expected to establish manufacturing bases in Pune through JV are CTR for suspension parts, plastic granules maker Cepla with TACO and brake manufacturer Sanchen with the RSB group.