SAIC-GM-Wuling Asks Suppliers To Cut Price 15%
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SAIC-GM-Wuling, who made this request on a meeting held in Changsha, Hunan province, intends to cut cost with its suppliers in response to the economic downturn, but the mini-vehicle giant hasn't given a clear price cuts.
Up to now, SAIC-GM-Wuling owns more than 300 suppliers, with 60% of its auto parts (by value) locally sourced in Liuzhou of southwestern Chinese province of Guangxi and the 40% high-valued auto parts sourced from other places. However, Wuling is not that capable to bargain with suppliers with high-valued auto parts.
Over the second half of this year, global automakers have been pressured by the huge cost with the spreading global financial crisis. It seems appropriate for automakers to demand price cuts of components when the raw materials prices dropped in large part now.
SAIC-GM-Wuling, as China's current No. 1 mini-vehicles manufacturer, tends to push a move for other mini-vehicles makers would follow. It is reported that mini-vehicle maker Hafei Auto also required its suppliers to cut price by 5% at the meeting with suppliers.
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