Financially troubled Fiat Auto has had a conflict-ridden relationship with its suppliers as it desperately fought to reduce costs. But last year that changed. Alex Graham talked to Fiat Auto Purchasing Director Gianni Coda.
Has the nature of your relationship with suppliers changed?
In September during the launch of the new Grande Punto, we started a new supplier program. The focus is to go from global sourcing to global partnership. We started with the 20 most important suppliers who represent 40 to 50 percent of purchasing spending in western Europe – about E4 billion. Our suppliers can make their investments because they can be sure that for the medium and long term they will get and keep our orders, without global sourcing every six months to check prices.
What does Fiat want from its supplier partners?
We need economically solid partners, good delivery and strong development policies. And, we want more competitive sources in eastern Europe or the Far East.
What is Fiat Autos target for sourcing from low-cost countries?
We have about 25 percent of parts coming from low-cost countries. We aim to reach 30 percent in 2006, and continue in this way. The Czech Republic and Poland are becoming medium-cost countries, but Romania is still low-cost. But we also have to look at what is logistically acceptable.