The Risen Cost of Auto Parts Weakening the Whole-car Manufactuers
2010-6-24 17:08:17
The Risen Cost of Auto Parts Weakening the Whole-car Manufactuers
Rebecca Chu
Recently, many auto parts manufacturers which situated in upstream of the industry chain standed down for several times, influencing the production of whole-car industry.Therefore,the relations in the auto industrial chain are interwoven,and bring a fresh thought to the industry.
During these years, it is a universal principle that auto parts manufacturers have zero inventory. Here, I’d like to discuss the question of the influence that the the increase of upstream labor cost on the ralation of the upstream and downstream industry.
In the auto industry, the upstream of the industrial chain is the main construction of cost. In general, the cost of auto parts occupy 60% of the whole-car production cost. Hence, it can be seen that the effective control of auto parts cost is a major and significant factor to the cost control of whole-car production enterprises.
Especially on hard times, whole-car production enterprises strengthened their requirement of cost control. For instance,in order to deal with the loss,Toyota Akio, the chairman of Toyota Motor Corporation, distributed the main assignment of cost control to its auto parts suppliers, and he also put forward a demand that the cost of auto parts should be reduced by 30% in three years.
However, in the recent stand-down incidents of auto parts manufacturers, all end up with an increase in salary, which shows that many auto parts munufacturers had to face the ever growing labor cost in the future. As the increase of labor cost, it is on doubt that the cost of auto parts manufacturers will climb quickly.
How to relieve the cost pressure of upstream is not just the problem of auto patrs manufacturers. Also, those whole-car enterprises may have to reinspect and adjust their relations with auto parts producers, and work together to offset the increased cost,which is a new task to the whole-car manufacturers, and a task that they had to confront with.
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