VIENNA -- China is not the only answer to reducing purchasing costs, said Bo Andersson, General Motors vice president in charge of global purchasing.
Eastern Europe and former Soviet Union countries such as Ukraine also were also options for low-cost sourcing of parts.
"We've had a lot of success with sourcing in Europe," Andersson told the Automotive News Europe Congress here on Thursday.
"We've put $2.5 billion into Poland," Andersson said. "Ukraine is very good -- we've moved more business there than we have to China."
Andersson said one drawback to sourcing components from China is higher logistics costs.
"In most cases there will be a 10 percent transportation cost," he said.
Burma, Pakistan, Vietnam and Cambodia were also promising as potential countries for low-cost sourcing, Andersson told a panel on cost control in the industry.
GM spent $86 billion last year on production materials. Andersson said about 75 percent of GM's business stayed with the same sources while the remaining 25 percent "will always move around."
Laurent Burelle, CEO of the French plastics supplier Plastic Omnium, told the Congress that his company's strategy to master costs is to become involved in an automaker customer's product development process as early as possible, then ensure maximum capacity utilization.
Burelle said relocation to lower-cost countries is not always an option for a supplier of large components such as Plastic Omnium.
"We cannot transport products such as class-A painted exterior body panels so we have to be close to the automaker," he said.
Wolfgang Dehen, Siemens VDO Automotive CEO, said: "We decide whether to export from China on a case-by case basis. We would not export an entire dashboard from there."
Dehen said that production quality in his company's Chinese plants was comparable to Western plants.
Dehen also said automakers should work in partnership with their suppliers.
If they squeezed costs too much, he said, "automakers will find that the supplier has no funds left for innovation."
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