Fiat Auto's purchasing manager Gianni Coda has revealed the recent changing nature of the carmaker's partnership with its major component suppliers during an interview this week with industry newspaper, Automotive News. As CEO Sergio Marchionne continues to successfully shake up the Auto Division from top to bottom, a strategy that has seen the carmaking losses finally turned to profits, no area remains untouched. With all the global manufacturers seeking to improve their purchasing strength and redefine their relationships with suppliers Fiat is not alone in seeking to evolve the process.

Has the nature of your relationship with suppliers changed, Automotive News asked Coda. "In September during the launch of the new Grande Punto, we started a new supplier program," said Coda, who has a great deal of experience of the Fiat brand as the Italian is a previous boss of the portfolio. "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 4 billion euros," he continued. "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 then asked AN. "We need economically solid partners, good delivery and strong development policies," replied Coda, adding: "we want more competitive sources in eastern Europe or the Far East.

Last AN enquired about Fiat's plans for shifting production to external countries asking: what is Fiat Auto’s 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," concluded Coda.