General Motors and Ford Motor Co. are taking a hands-on approach to address a shortage of qualified suppliers in Russia.
Only 5 percent of the country's 300 Tier 1 parts makers meet Western quality standards, according to the Russian industry ministry.
To solve this problem, GM and Ford arrange on-site training at Russian suppliers to help them make better components.
GM says it especially needs parts makers in Russia that can provide high-tech components.
"We have good suppliers of stampings, rubber products and subassemblies, but we lack suppliers with the ability to produce parts that require technological expertise," said Eric Alstrom, General Motors Europe's head of purchasing.
GM is working with its eastern European partners AvtoVAZ, ZAZ and FSO to identify new suppliers.
The automaker assigns a team to work with suppliers that it considers potential sourcing partners, Alstrom told Automotive News Europe. "It takes them about three months on average to meet our expectations," he said.
Arndt Fuhrmann, Ford's senior purchasing manager in Russia, says the shortage of capable parts makers is a problem.
"We don't compromise on quality," Fuhrmann said in an e-mail. "It means the necessary supervision of Russian suppliers is time-consuming at first, but we are reaching our quality and cost goals."
Russia's new-car sales are growing, and GM and Ford want to get their share of that growth. That's especially important, given the poor sales in other European countries.
GM is the top-selling foreign brand in Russia. Ford is No. 2.
GM assembles Chevrolet Captivas and Opel Antaras from kits in an interim 4,000-unit-a-year factory in St. Petersburg. It plans to open a 70,000-unit plant next to its current plant by the end of next year.
GM also builds Chevrolet Viva and Niva models in Togliatti in a joint venture with AvtoVAZ, Russia's largest carmaker. In addition, Avtotor builds Cadillacs, Chevrolets and Hummers for GM in Kaliningrad.
Ford will expand annual production at its St. Petersburg factory to 125,000 units early next year from 72,000 now.
Renault will boost annual capacity in its Moscow plant to 160,000 by mid-2009 from 80,000 now.
Volkswagen started car production this month in Kaluga, near Moscow, and Toyota expects to start building at its St. Petersburg plant next month.