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Although auto industries in North America and Europe are still deep in recession, global suppliers are continuing to ratchet up their sourcing activities in China.
Magna International"s sourcing from China increased from $262 million in 2006 to $407 million in 2008, said Du Min, Magna International"s executive director for global purchasing in China at an auto parts purchasing conference in Beijing.
The event was convened last week by Automotive Industry Action Group, a non-profit organization started by the Detroit 3 in the early 1980s to address cost and supply issues facing the global auto industry.
"The figure so far this year has already exceeded that of 2008," Du said while speaking at the conference.
Magna"s target for sourcing from China for 2012 has been set at $1 billion, she added.
The value of Fiat Group"s sourcing in China in 2009 is expected to be 200 million euros, doubling the figure of 2008, said Jack Cheng, vice president of Fiat (China) Group, who also spoke at the AIAG conference.
Three years ago, parts Delphi Corp. imported for the products it made in China accounted for more than 60 percent of the total value of those products, but now the percentage has dropped to 40 percent, said David Zhang, Dephi"s logistics manager for China and East Asia, at the event.
"Local suppliers have improved their capabilities in delivering parts with high and stable quality," Zhang said.
Magna"s Du also noted local parts suppliers have better ability than before to provide reliable products.
However, to expand their businesses, local Chinese parts suppliers in general still lack the ability to provide on-site warehousing, assembly and engineering support for their customers in foreign countries, she said.