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Visteon opts for Chinese parts

By Li Jian (China Daily)
Updated: 2007-02-08 09:34

SHANGHAI: Auto parts maker Visteon Corp said yesterday it would buy more Chinese parts to cut production costs.

Currently, 20 percent of the firm's global purchases are from China, while 50 percent of its Asian suppliers are Chinese, said Sylvain Caillet, global purchasing director of Visteon's Asia-Pacific and Electronics Divisions.

"China is critical to our success. This is why we have located our global electronics and our regional purchasing at our China technical center in Shanghai," he said.

He said the company hoped to increase its purchases of Chinese electronics by 30 percent. It also plans to develop local suppliers for Visteon's global network.

The company made the announcement amid restructuring efforts and business portfolio changes to improve operational and financial results in 2008. It said recently it would close an eastern Indiana auto-parts plant in the United States, part of efforts that began last year to close, fix or sell 30 plants.

Visteon said it needed a Chinese supplier to provide cheap auto parts as high production costs in North America had resulted in a drop in profit.

The company has created a supplier development program to establish a competitive supply base that can achieve the lowest delivered cost, according to a release from the company.

Visteon said it would help its suppliers in China reduce costs and improve the quality of their products. "Our long-term goal is to improve the capability of key suppliers in China to play an increasingly important role in Visteon's development both locally and globally," said Caillet.

(China Daily 02/08/2007 page14)