LONDON - Volkswagen isn't getting the full benefit of operating in a low-cost country, said its sourcing director in Slovakia.
International Tier 1 suppliers producing in Slovakia charge the same price for their systems as they do for parts from high-cost countries, complained Wolfgang Rohroff, in charge of sourcing for Volkswagen Slovakia.
"This is why I want smaller companies to come to Slovakia," Rohroff said during a conference here. "Smaller, more independent companies don't need to compensate for the higher costs they incur in other countries."
Rohroff's responsibilities include supplying Volkswagen's Bratislava plant, which builds the VW Touareg premium SUV, the Polo small hatchback and bodies-in-white for Porsche's Cayenne SUV. Later this year the plant will add the Audi Q7 crossover, which will have the same underpinnings as the Touareg and Cayenne.
Hard to get
Rohroff said that nearby suppliers - those within a 200km to 400km radius - are unable to provide components such as small plastic parts, electronics parts and surface treatments for metal items.
"For metal treatment we have to send away to Germany or Scandinavia, giving us extra transport costs," Rohroff complained. Some small electrical and electronic parts have to be trucked in all the way from Spain, he added.
Rohroff said a potential solution to the logistical and cost problems VW faces is for Tier 2 and Tier 3 suppliers to come to Slovakia to support Tier 1 module makers.
If that happens, he estimates that E45 million to E50 million could be saved on transports costs.
Factor in the lower wages paid in Slovakia and Rohroff thinks that the supplier could split its savings with the automaker and still end up with a component that costs much less than a part made in a high-cost country.