Not all good with Tier 2s

The other day, Ratindra Puri of Lear India made me sit up and take notice. The event was a conference organised by Worldwide Business Research (WBR) and Mr. Puri was giving a presentation on Lear's success in India.

Lear has been here now for almost a decade and is the market leader in seats with significant presence in interiors (though that business has been sold off globally to IAC). The company is a major supplier on three new vehicle programs in 2006 and to four new ones in 2007. Significantly, Lear India is supplying to seven OEMs in India and is the only Indian supplier - apart from Tata Johnson Controls - to supply to BMW in Chennai.

But what made me sit up and take notice was Ratindra Puri's assertion that they are not happy with the quality of Tier 2s in India. So much so that they have decided to bring in their most critical components and manufacture them on their own.

Yes, Lear India is vertically integrating.

That's quite surprising considering that Lear has a 100 Tier 2s in India and sources 3742 components from them. And they have been working together for around a decade now. Surely the opportunity to train these Tier 2s must have been there?

Or am I missing the point? Maybe the Tier 2s are really very bad. Not unimaginable as most of these companies are below the radar operators with small turnovers who mostly thrive on supplying nuts and bolts (or steel tubing) to a couple of Tier 1s and he aftermarket. read more.......

Deepesh Rathore
Research Editor
deepesh.rathore@supplierbusiness.com
For more details on Tier2s visit www.theautodiary.com