80% of GM's chrome parts come from China
On January 29, Buu Anderson, vice president of GM's international procurement business, said in an interview with the media: "GM may not be able to complete the goal of purchasing 10 billion US dollars of components in China before 2009." He explained that this kind of The main reason for the situation is the increase in the price of components in China.
In 2004, GM of the United States announced that it planned to purchase parts and components worth billions of dollars in China every year, and by 2009, the total purchase of parts and components in China will reach 10 billion US dollars.
It is understood that due to the low prices of Chinese parts and components, several multinational auto companies have announced similar procurement targets for Chinese auto parts. Procurement plans for many companies are currently underway. According to statistics, at present, Ford purchases about 3 billion US dollars of parts and components from China every year, and GM's imported products in China include cables, sun visors, automotive textiles, and seat fabrics. In addition, 80% of GM's chrome parts come from China.
Market analysts said that in the past two years, American auto companies often used the "Chinese price" as the standard to formulate global procurement plans. Many parts suppliers have been forced to lower their prices in order to take a share of the large purchase orders of European and American auto giants. For now, however, the buying spree for Chinese components is cooling off. The main reason for the cooling is that the "China price" is no longer the lowest price. A German supplier joked: "In the past, GM always talked about Chinese prices. Now, we rarely hear this word, probably because the prices of Chinese components are not so cheap anymore."
It is understood that rising labor costs, rising raw material prices, and the appreciation of the RMB have all contributed to the rise in component prices. A market source said the price hike could make multinational auto giants adjust their purchasing plans around the world. In addition, he pointed out sharply that Chinese parts and components enterprises need to improve their comprehensive competitiveness as soon as possible, actively solve the problems of aging production equipment, lack of management experience, and low-quality control level, so as to improve the market competitiveness of products.
Anderson said that GM has a 200-person team in Shanghai, China, dedicated to helping parts suppliers improve themselves. A few years ago, only 1/5 of Chinese component suppliers could meet the general standard, but now that number has reached 1/3. In fact, even if the cost of "training" the team is included in the cost of purchasing parts in China, purchasing in China is very "cost-effective". But that appeal is waning as prices for things like raw materials and labor rise.
Some analysts said that Chinese auto parts companies are currently facing a critical turning point. It is difficult for Chinese auto parts companies to continue to pursue a low price strategy to maintain long-term competitiveness.
