Dongfeng cuts cost by RMB 1 bln to meet rising price of materials

Shanghai, April 1 (Gasgoo.com) Dongfeng Peugeot Citroen Automobile announced on March 31 that the auto-making company will cut down its manufacturing cost by RMB 1 billion in 2008, in order to deal with the disadvantages brought by the soaring prices of raw materials.

According to the vice general manager Qiu Xiandong of Dongfeng Citroen, the rising prices of producing materials (such as steel products, rubber) and human resources at present indeed have brought tremendous pressure to the company.

It is estimated that now only raw material price’s rising has led to an RMB 156 million increase in the operating cost for the company. For each vehicle, the cost can rise by an average of RMB 780.
 
However, Qiu Xiandong claims the company will still maintain the competitive price, and this year it plans to reduce the cost by RMB 1 bilion, namely reducing the cost by RMB 5,000 on average for each vehicle.
 
It is reported that three measures will be adopted to lower the cost: The first is to help the supplier to cut the rejection rate to reduce the cost, the second is to further improve the domestic manufacturing rate, and the third is to take measures to save the physical distribution cost.

It is reported that Dongfeng Peugeot Citroen Automobile will put into the market 20 new vehicle models in the next 5 years, including the five models to be launched this year.