DETROIT -- General Motors will source more parts from low-cost countries such as China for its vehicles built in North America and Europe, senior executives with the automaker said on Tuesday.
"I think every automaker is looking at low-cost countries," said Ray Young, GM North America's vice president and chief financial officer, told analysts at a meeting on Tuesday. "It really comes back to who's going to execute it the best."
A team of GM executives traveled to China earlier this year to assess the capabilities there and came away impressed, Young said.
"We do believe this represents significant opportunity," he said.
Currently, about 97 percent of the parts in GM vehicles built in North America are sourced domestically.
However, GM has plans to use a China-made engine in the new Chevrolet Equinox compact sport utility vehicle, which will be assembled in Canada and is scheduled to go on sale next year.
GM also has plans to import some cars into North America from overseas. Next year, GM will launch in the U.S. market the new Chevrolet Aveo, a small car built in Korea. And later this year, GM will import the new Pontiac GTO made in Australia.
GM's European operations will also purchase more parts from beyond its traditional Western Europe base, said Mike Burns, president of GM Europe. GM Europe will source more parts from central and eastern Europe and from Asia-Pacific to cut costs, he said.
GM has targeted cutting its material costs, such as car parts and systems, this year by 3 percent in North America, and by 3.5 percent in Europe.
"Our intent is really to accelerate beyond the 3 percent target," Young said.
Young said those cost cuts are accelerating by applying principles it learned from making its manufacturing operations more efficient to other parts of the business.
For example, GM has cut $25 million in costs from its system to communicate with its thousands of dealers, Young said.