GM to buy more high-value car parts in China
November 30, 2007 - 12:30 am ET
BEIJING (Reuters) -- General Motors expects to buy more, increasingly
sophisticated car components in China, the firm's fastest-growing
procurement market, as the country's auto parts industry clambers up the
GM, one of the world's top two auto makers, will increase its
procurement spending in China by 25 percent a year in the period
2005-2010, a senior executive said today.
Bo Andersson, group vice president in charge of GM's global purchasing
and supply chain, declined to give a dollar total for the plastics,
electronics parts, aluminum wheels and other components that GM buys in
Andersson said the local industry was increasingly producing higher
value-added parts that GM now procures elsewhere.
GM, which buys 20 million parts a month from 190 Chinese suppliers, had
experienced no quality problems over the past year, he told a news briefing.
"You will see a shift into air conditioning and also chassis parts,
steering parts and brake parts," he said.
Andersson said 90 percent of the materials and parts in a locally
manufactured GM car are sourced in China -- 60 percent of them from
multinational firms and 40 percent from Chinese rivals.
He cited Dicastal Wheel Manufacturing Co Ltd, which after just a few
years as a GM supplier now provides half of all the aluminum wheels that
GM uses globally.
GM is reducing costs after losing more than $12 billion in the past two
years. It is in the midst of a sweeping restructuring that includes
cutting more than 34,000 jobs and closing 12 plants in North America.