General Layout Of The Automotive Global Sourcing In China Strategy

With the development of IT technology and the convenience of transportation, global economic integration is becoming an irreversible trend. The high speed development of BRICs (Brazil, Russia, India, China) and Southeast Asia countries make the center of the manufacturing industry begin to shift to these countries. Re-optimizing the supply chain and looking for low cost but high quality suppliers in developing countries become essential for those manufacturing industry's Multinational Corporations.General Motors has been the No. 1 in global automotive manufacturing industry for many years. Although they just set up their first plant in China at the end of last century, their development here is very fast. In the past ten years, they established several manufacturing plants and one technology center. They not only have high share in China market, but also make the plants and technology center in China be important in General Motors global strategy. Recently, being faced with the threat of their main competitor TOYOTA in global market, General Motors regards global sourcing strategy as a very important weapon of "turn over" plan. Obviously, China is a key part of this weapon.The growth of China's GDP has been higher then 10% for several years. After joining WTO, Chinese enterprises that were protected by the government have strengthened themselves through the competition. They are not beaten. China automotive industry is benefited from the constant growth of the domestic automobile market, input of foreign capital, technology and management experience. When the global sourcing trend comes to China, many Chinese enterprises are ready to compete with the competitors in the world. More and more Chinese enterprises begin to realize that taking the opportunity to become a key part of those Multinational corporations' supply chain is really important to their future.This paper firstly analyzes the strategy environment of General Motors in China, and then analyzes the competitiveness in the industry by introducing "the five forces framework" and "industrial cluster" theory. SWOT analysis was also utilized. The author analyzed the supplier selection process, supplier relationship management, value chain and the comparison with competitors' sourcing strategy, and then proposed some necessary adjustment on organization structure, human resource strategy and information management for General Motors. At last, from the view of Chinese suppliers, this paper also tries to find out the opportunities and challenges that Chinese suppliers are facing during the Multinational corporations' strategy adjustment and supply chain optimization and the way to deal with the change.