The Research Of Unit Price Control For TRW Purchasing

In past five years, there was a big growth of Chinese automotive industry. The volume of cars production and sales was increased to over10million cars annually and China market becomes the biggest automotive market now in the world, and the volume was further increased to over20million in2013! Everybody is so surprised in this big growth. Almost all world automotive related companies come to China to extend their business, some have increased the investment, some have established new facilities, all these show us very flourishing business in automotive industry in China. Local OEMs are becoming stronger and stronger as well, for example, Greatwall auto company, GAC, Geely, Cherry, etc, which have given local automotive component companies so many opportunities to grow their business accordingly. Not only most of oversea famous OEMs come to China to pursue the business opportunities, whatever from Europe, North America, Japan, or Korea, etc, but also so many oversea relative automotive component suppliers come to China market accordingly. And then, the competitive market of China automotive is becoming an epitome of global automotive market. This means China market is open, complicated, competitive, and attracted. How to adapt to the market requirements, follow the market growth? How to reduce the cost to show the competitive offers? How to survive in this so complicated competitive market? All of them have to face those questions and try to resolve them. No solution, maybe no surviving in the near future.TRW Automotive, as one of top15global automotive suppliers, has been growing and growing with China automotive growth since their AP center has been moved to Shanghai from2003. But cost pressure has been coming and coming during their fast growth period, their advantage of competition is becoming more and more weaker because China supply base is becoming more and more maturer, it is more and more difficult to win new projects accordingly, the most challenge is the higher sales unit price, how to reduce the purchasing price, reduce the total cost, get the final lower sales price, is one of the key items which will impact on the business market share extension.Here analyses overall domestic automotive industry, including automotive supplier base. It focuses on the market status of automotive supply and demand. According to the rules of unit price control, it deep dives in TRW China purchasing situation:success and problems. To avoid the problems, improve the cost control and lower the unit price, it tries to find the answer for TRW how to get the correct approach to reduce the unit price of purchased components. The lessons learned from TRW are helpful for other relative companies in the field as well.At the same time, how to evaluate the unit price to understand if it is the best offer in the market, how to analyse the unit price, how to leverage suppliers to take actions to lower their price, etc., all these questions cared by automotive industry are answered in this study as well.