Global carmakers to boost auto-parts sourcing in China

Shanghai, June 30 (Gasgoo.com) Sourcing and technology executives of some global auto-making groups said in Wuhan yesterday that their companies will boost sourcing rates in low-cost areas and will expect to cooperate more with China's auto-parts manufacturers.

PSA Peugeot Citroen, the second largest European automaker, will increase the rate of its sourcing in the low-cost countries to 40%, valued at about 600 billion euros, by 2010 from 23% in 2007, said Xu Qingzhao, deputy executive of Asian sourcing of the French carmaker, adding that there exist huge opportunities of cooperation between PSA Peugeot Citroen and Chinese suppliers (of auto parts), and China is expected to gain larger market share.

However, Xu noted that China's auto-parts manufacturers also face some challenges such as raw materials shortages, weak capabilities of research and development, low technical and management skills, unstable product quality, and language barriers. The rising labor costs and Chinese currency appreciation are also big issues Chinese manufacturers have to address.

Zhang Yikang, chief technical officer of Ford (China), said that to become suppliers of global sourcing will help Chinese manufacturers to boost their sales, bring their technologies and management to new heights, and improve their quality control systems and corporate images.

He also advised that Chinese suppliers should conduct their independent design and development based on the given technological specs and conditions. "The contracts will be short-lived if your manufacturing only follows the designs of others."