Affinia Actively Launches China Business

Affinia Vice President of Global Sourcing David C Sather

Gasgoo.com: Please tell us about the regional distribution of Affinia's global purchases in 2010 and the share of China's purchases.

David C Sather: The distribution of Affinia's global procurement has changed dramatically over the past three years. In order to streamline and optimize business, we have closed 25 factories, mostly in North America. In this process, we realized the needs of Asian customers and began to expand the company's business in Asia. Today I am very happy to see that Affinia already has three very good factories in China. Brake discs have been manufactured in China before, and we recently built a filter factory in Longkou, Shandong, which will begin production operations in April. In October last year, we established a factory in Lacey, which is located between Longkou and Qingdao, and is expected to start production in July this year. In addition to China, Affinia has substantial input in India and other countries that we call the best-cost countries. We will focus on the localization of raw materials and parts procurement, and support the development of Chinese factories by investing in manpower and technology.

Affinia's global market layout is still adjusting. North America is still our most important market. In the past few months, we have established distribution centers in California and the East Coast.

Gasgoo.com: How is Affinia's business development in Europe?

David C Sather: Europe is not Affinia's main market. Some of the products we produce in China will be sold directly to Europe. Recently we acquired a North American company that is a chassis manufacturer for the European market. We hope to be able to develop more customers in Europe through acquisitions.

Gasgoo.com: China's new car sales are growing rapidly. Will it affect Affinia's procurement strategy in China?

David C Sather: We also realize that China’s car ownership has grown rapidly in recent years. As the automobile industry continues to expand in Asia, our business in China and Asia will also develop in depth. We realize that the strong demand of the automotive market will create a good opportunity for our brands and products. At the same time, it will also make our product supply base more powerful. This means that we will provide car owners with more product numbers and a wider range of products. The selection space is more in line with the needs of customers in China and Asia.

From Affinia's global market, our procurement strategy will not change.

Gasgoo.com: Affinia has closed many factories in North America and came to China in the most cost-optimized country. Apart from cost factors, are there other reasons?

David C Sather: In recent years we have closed some of our plants in North America and have invested in factories in Asia, where cost control is the driving factor. Today's global consumers want products with competitive prices. Sales prices need to fall, and costs are rising. Our customers hope that the cost will improve, and we have only tried our best to reduce production costs. Only by producing to the best cost country can we meet the needs of our customers. At the same time, we will also expand our own business in China. We are also actively looking for dealers and partners in aftermarket products. This is in line with our strategy of producing products in the most cost-effective countries, which not only meets the need to reduce costs. The goal is to enable us to produce the products we want and lay a good foundation for our future business in China.

The growth of China's auto production proves that there will be great room for our future development in the Chinese market. At present, Affinia has brought high-quality products produced in the world to China and is ready to provide first-class products and services to Chinese owners.

Gasgoo.com: Where are the strengths and weaknesses of Affinia's procurement in the Chinese market?

David C Sather: The advantage of Affinia's procurement in China is that its products are of high quality and low price. The disadvantage is that the stability of supplier services is not strong.

We serve the global market and we certainly hope that our products will be produced on time and suppliers will be able to deliver the goods in the first place. However, suppliers often have various reasons to postpone delivery. Therefore, we hope that our suppliers will improve their services in the future. As we conduct business in China and Asia, we will have higher requirements for our sales and customer service personnel to respond to customer needs, and the stability of products and suppliers will also be elevated to a new level.