PSA Peugeot Citroen said yesterday its sourcing of car components from China would more than triple within two years, joining in the slew of overseas car makers to add China as their global sourcing base.
Europe's second biggest car maker would buy 8 billion yuan (US$1.03 billion) worth of spare parts from China by 2010, compared with 2.5 billion yuan this year, said Armand Chen, vice president of Peugeot Citroen China Business Unit TASC.
"China plays a vital role in Peugeot Citroen's global procurement," said Chen.
''The increasing purchase from China is not only because of the lucrative domestic demand but also because of the price competitiveness brought by the country's maturing automotive industry compared with other low-cost nations,'' he said.
International car makers have been increasing purchases of spare parts from the world's second largest auto market over the past few years after global spare parts makers moved factories to China.
Exports also jumped as domestic players have updated technology to develop more value-added products in addition to previously low-price devices.
The export value of car components rose 19 percent to US$15.3 billion in the first half, according to the China Association of Automobile Manufacturers.
"Besides the price advantages, domestic auto parts makers began to pay more attention to forming their own R&D capability that helps to attract overseas buyers," said Xiong Chuanlin, vice secretary general of CAAM.
"However, service and product quality remain the two biggest problems for domestic companies in joining in the international sourcing network," Xiong said.
(Shanghai Daily September 25, 2008)
