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Ford to boost China parts purchases

By Gong Zhengzheng (China Daily)
Updated: 2006-10-27 10:31

Struggling US carmaker Ford Motor Co yesterday said it will nearly double its sourcing of auto parts this year in China, the firm's fastest-growing major market.

Bill Ford, the Detroit-based group's chairman, said yesterday in Beijing that the company expects to purchase China-made parts worth between US$2.5 billion and US$3 billion this year.

The volume is up from US$1.6 billion to US$1.7 billion in parts purchased from China last year.

The parts will be used by Ford's plants in other Asian nations, as well in the United States and Europe.

"We are only scratching in surface in China, but we have made significant progress," said Bill Ford, great-grandson of the company's founder Henry Ford.

"It's China, it's ASEAN (the Association of Southeast Asian Nations), it's India, really the whole Asia region is growing important to us in terms of our global sourcing strategy," he said.

Sourcing of cheap parts in China and Asia is becoming an increasingly important means for the loss-ridden group to cut its costs. Ford recently posted third-quarter losses of US$5.8 billion, mainly due to sagging sales in the United States.

The company's parts purchases in the entire Asia-Pacific region stand at some US$9 billion a year, said Mark Schulz, head of Ford's international operations. Globally, its parts purchases are worth US$80 billion to US$90 billion annually.

Ford now has more than 100 first-tier parts suppliers in China, according to Ford Motor China spokesman Kenneth Hsu.