GM to buy more high-value car parts in China
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 China.
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.