Hyundai reveals deeper ties with suppliers in bid to create high levels of localisation

Hyundai has said that its strategy to maintain a co-operative approach with its suppliers has paid off as it has been able to achieve higher levels of localisation as well as giving it the chance to offer premium models in the market.
A report from the Hindu, quotes the South Korean automaker as saying that it took up the responsibility of helping its suppliers get access to international standards in order to raise the bar. This move has helped those suppliers remain competitive in terms of quality as well as volumes.
The company admits that it now has over 90 per cent localisation and this one of the most important things that has helped keep costs in check. It currently imports some of the electronic components which it is not able to find locally or is too expensive to currently source from a local vendor. However, it is says that it is working on competitively localising these components too.
Another factor in the contribution of high levels of localisation is the proximity of suppliers to the facility in Kanchipuram giving them the option to be flexible in terms of components and supply times. It currently has around 78 per cent of its suppliers at Chennai, Kanchipuram and Thiruvallur districts.    
The higher the level of localisation, the more competitively an automaker can price their products. While Maruti Suzuki is clearly the leader in this regard, Hyundai has been a strong second place player for many years now.   

Source:Hindubusinessline