Volkswagen AG is embarking on an auto component sourcing drive from India, which will see the company ordering materials worth one billion euro for its global operations, within the next two years. Volkswagen currently makes annual purchases of auto components worth 70 billion euro from suppliers across the globe.

“Our target is to give priority to local suppliers for our soon-to-be-launched Polo once the Pune plant starts operations by the end of 2009, Volkswagen AG global Head of Purchase (New Product Start-Ups) Bernd Martin said. “We are planning to source at least 55 per cent of the components for the plant and its production at the start of our operations and take the figure to 70 per cent within two years of that,” he added.

The German automaker is also aiming at about 70% localisation of its cars produced in India within two years of starting operations at its manufacturing unit at Pune in Maharashtra.