Bangalore: German luxury car major DiamlerChrysler will outsource from India IT services and auto components valued at over $ 100 million this year, a top company official said today (Aug 7, 2004).

"Diamler plants in Europe source IT services and auto components directly from suppliers in India and nearly 80 per cent is done from Bangalore," DiamlerChrysler India CEO and Managing Director Hans-Michael Huber told reporters in Bangalore at the launch of the new Mercedes Benz C Class range.

He said about one thirds of the $ 100 million outsourcing by the global plants of Diamler, which produces Benz cars, is software services, with the rest being auto parts.

Last year, the firm outsourced IT and components valued at $ 85 million from India.

Presently, Huber said, most of the auto kits in Diamler's vehicles had components produced in Europe, adding, "this situation can change in the next five to six years" with the company looking at sourcing components from China, India, East Europe and Latin America.

"The competition for Indian entrepreneurs will not be the high quality low cost production here with the high quality high cost production in Germany or Europe.

Huber said about 8 to 10 IT firms including the big five software companies like TCS (Tata Consultancy Services), Infosys and Wipro were providing services to Diamler, besides exports from about 20 suppliers of parts and components.

DiamlerChrysler India, he said, was aiming to sell 2,005 vehicles in the country by 2005, with a revenue and sales growth of 15 per cent annually.