Root Cause Analysis And Countermeasures On Purchase Localization Insufficient Progress For BS (Suzhou) Chassis Brake Division

As all automobile makers are facing keen competitive for sales, Product cost reduction is one of the major strategy to win more market share; how can they make cost reduction? Firstly to lower cost, and lower purchase material cost is one of the key measures to meet the cost reduction target. Considering China low labor cost and avoiding high transportation cost, raw material purchase localization is a key performance indicator for MNC purchase teams; also all MNC auto parts suppliers are bringing forward their localization schedule after China regular - The Measures for the Administration of Import of Automobile Components & Parts Featuring Complete Vehicles– be effective.This paper firstly uses Comparative Advantage theory, Transaction Cost theory, Value Chain theory, Tariff Wall and Local Content Requirement theory to explain the practical reason, which sets up a theory platform for the whole; on this basis, summarize the key performance indicators of purchase localization current status, make a comparison among the key major competitors; so does the operation model. Then study root cause on the following sections such as top management team localization strategy, internal management, poor supply for China providers and China macro policy environment, to find where they can make improvement. Finally, BS company should learn some successful experience and better operation model and combine with their own feature to work out a countermeasures at below three phases: short-team to reasonably to set up localization strategy, middle term to change the design to meet local market, and long team to merge one of the top biggest pure China owned competitors.