General Motors to Increase Sourcing in China

Auto manufacturer to spend 25% more per year on Chinese components through 2010.

While manufacturers are certainly split on the notion of sourcing overseas, General Motors recently voiced its opinion on the matter. The company told Reuters that it expects to buy more, increasingly sophisticated car components in China, the firm's fastest-growing procurement market, according to one of GM's senior executives. The company said that it will increase its procurement spending in China by 25% per year in the period 2005-2010.

According to Bo Andersson, group vice president in charge of GM's global purchasing and supplier chain, China's local industry is increasingly producing higher value-added parts that GM now procures elsewhere and that the automaker, which buys 20 million parts a month from 190 Chinese suppliers, had experienced no quality problems over the past year. Andersson went on to say that 90% of the materials and parts in a locally manufactured GM car are sourced in China -- 60% of them from multinational firms and 40% from Chinese rivals.

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