Research On Car Components' Sourcing Strategy Of FAW-VW

With the high development of Chinese domestic ecnomics, the automobile market expands quickly, at the same time, car components industry grows remarkably. Since the first joint venture between SAIC and VW established in Shanghai, JVs and domestic brand of car enmerged everywhere in China. Nowadays car industry becomes a important backstone of GDP increase. With the growth of OEM, car component industry made great development in the past decade.Although the cost of car is under the controll of OEM, it is still influenced by suppliers a lot. The brand image of car and the cost performance should be built based on matured and sustainable developed suppliers. Considering the short term target, how to wisely choose supplier and set the series price before new carline launches, is the key point to control the cost and quality of car and to establish core competitiveness. Considering the long term target, a OEM which want a sustainable growth must establish a powful supplier systerm. Then a scientific and meticulous forward sourcing process is needed to furthest control the price and tooling cost to make best cost of the car, under precondition of quality and time schedule.This subject on the aim of establishing a scientific sourcing strategy and detailed practice method, based on FAW-VW's current supplier systerm and forward sourcing process. It is significative to FAW-VW and also domestic brands. Via cases-analyze on the current sourcing module of some famous OEM, such as Toyota, Volksvagen, GM, Ford, etc, and comparing multi-bidding with single-cooperation sourcing strategy, this article concludes the rules on the sourcing process to assort the management of car components and suppliers and to research on forward sourcing process, based on FAW-VW's current sourcing strategy. During the research on supplier management, this thesis establishes different supplier managements, and describes detailed concept for core-supplier and new definition for group-supplier and plotics-supplier , based on industry organization theory (corner, competition) and strategy alliance theory, also using other industries'management for reference; during the research on assort of components, this thesis invites a new assort method which sort the componets into three kind: fully competed components, oligarch competed components and corner components, by the competion of suppliers. And by these assort; the thesis establishes a competation&cooperation combined sourcing strategy system according to different components and suppliers. Detailed rules, process and practice method are also expatiated to make this strategy much more suitable for FAW-VW's current supplier system and managing target. This new strategy amends the loss of intensivism and long-term cooperation in muti-bidding type, and the loss of cost controlling in single-delivering type. This strategy is then continued with supplier capacity improvement, information follow-up and feedback mechanism and capacity monitoring mechanism to form a supplier circle mechanism and to provide a condition for OEM's Long-term and sustainable development.