GUANGZHOU, December 31, 2008-- To reduce costs amid the current market downturn, General Motors' China joint venture SAIC-GM-Wuling Automobile Co. is forcing its suppliers to bring down prices of their parts in 2009 by more than 10 percent.

 

The request was made at an annual supplier conference SAIC-GM-Wuling held in the central China city of Changsha in mid-December.

 

"SAIC-GM-Wuling wants us to accept a 10 percent price cut for our parts supply in the annual contract for 2009," says a marketing director of a Chinese supplier of exterior and interior plastic parts.

 

Many other suppliers, especially those supplying non-metallic parts, were also asked to lower prices by 10 to 15 percent, he says.

 

But the director says his company is negotiating with SAIC-GM-Wuling for a 5 percent parts price cut.

 

He adds SAIC-GM-Wuling has urged them to reduce parts prices each year in the past, but never by such a big margin as this year.

 

A spokesperson for SAIC-GM-Wuling confirms his company has asked the suppliers to bring down parts prices, but she declines to say how much they need to lower the prices.