Global procurement of auto parts "Indian fever" is not enough

In recent years, due to the impact of rising prices of raw materials for auto parts, the appreciation of the renminbi, and rising labor costs, the cost of manufacturing auto parts in China has been rising. Domestic and foreign automakers have shifted their procurement centers from China to India in order to reduce the cost of parts procurement.

Recently, Volvo said that in the next four years, Volvo's parts purchases in India will increase to four to five times, that is, annual purchases will increase from the current $1 billion to $4 billion to $5 billion; last year, Nissan The purchase of auto parts in India is planned to increase to 90 million U.S. dollars in 2012; the Italian Fiat Group Purchasing Company has also stated that it plans to purchase 1 billion US dollars of auto parts from India in 2010; Hyundai Motors plans to increase its presence in India's auto parts purchases to supply production facilities under the global group.

Domestic and foreign automakers have increased their purchasing share of Indian auto parts to a certain extent, reflecting the rapid improvement of the technical level, quality and competitiveness of the Indian auto parts industry. Does it mean that China will lose its position as a global auto in the next 10 years? The status of the parts procurement center?

In response to this, Mr. Shen, who is in charge of automotive procurement research at Roland Berger, who will give a speech at the Global Automotive Purchasing Summit held by Gasgoo.com, said: "The parts and components that international auto and parts companies purchase in China are labor, Products with intensive raw materials and high energy consumption are the main products, and China has obvious comparative advantages in these product fields, and the export of such parts will continue to maintain strong competitiveness."

In fact, the quality of Indian auto parts is difficult to match the quality of Chinese products. The main reason is that its purchasing power is insufficient. On the streets of India, there are cheap small cars similar to Suzuki Alto. These buyers have not participated in inspections for many years, and the demand for repair parts is huge. This has led to a significant increase in the number of automotive parts and products, while reducing the quality of automotive parts and components. At present, two-thirds of the auto parts products in the Indian market are counterfeit counterfeit products. India's imitation products manufacturers are difficult to count. They make India's parts and components industry group extremely complicated. The OEMs often go from 1000-1500 apart. The procurement of parts and components factory is very unstable due to poor road conditions.

Recently, the frequent recall of Jaguar, a subsidiary of India's largest manufacturer, Tata Motors, is a testament to the quality problems caused by the large-scale transfer of auto parts procurement to India regardless of product quality.

In fact, the way in which OEMs reduce the cost of purchasing auto parts is not the only way to simply source parts from low-cost countries. For example, the OEM can also achieve further cost reduction through effective cooperation in technology and logistics. Regarding the sharing of resources, cooperation and how to effectively cooperate in the automotive industry, promoting fair and reasonable distribution on a global scale has always been a hot topic in the industry. This issue will be on the status and direction of China's auto parts industry in the next 10 years, even to China. The impact with India in the global context of the industry has had a profound impact.

In this regard, the Chinese automotive industry has given great enthusiasm to the “Global Automotive Industry Purchasing Summit Forum”. The annual forum has become an excellent opportunity for global automotive procurement elites to collide and share ideas. It is reported that the organizer, Gasgoo.com has invited more than 20 OEMs and first- and second-tier suppliers to purchase executives. They will focus on exploring and analyzing strategies to reduce the cost of purchasing auto parts, sharing their purchasing experience, and will The development trend of China's auto parts industry in the next 10 years is estimated.

Regarding the current acute problem of how the Chinese auto parts industry responds to the Indian market, the procurement managers will give advice on the development status and prospects of the two countries' auto industry. As a purchasing director of a domestic joint-venture automobile company that is about to attend, the imbalance between the development of the automobile industry in the two countries and the difference in industrial structure are bound to lead to two different procurement paths, the future of China's auto parts industry. It will not be related to the development of the Indian market.
 

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