IndiBlog

Volkswagen AG has signed its first sourcing agreement with the Delhi based Minda Industries (MIL) for supplying auto components to its Indian and International operations. The Rs 60 crore ($15 million) agreement is to supply headlights and rear combination lamps to Volkswagen’s upcoming cars in India which include the Jetta sedan, the Polo hatchback and the Up! micro car which would start rolling out from its new plant in Chakan near Pune by early 2009. Volkswagen has asked for quotations from other Indian suppliers for components such as horns, locks, automotive switches, electronic starter motors & alternators.

Volkswagen would need to have a high local component ratio in its cars to keep the costs low and thus price the models attractively in the value sensitive Indian market and also manage to export profitably.