Formation of a parts supply System in the Chinese Automobile Industry
1999 Volume 5 Pages 55-60
Details
1999 Volume 5 Pages 55-60
The largest automobile company in China, CHINA FAW GROUP CORPRATION, was established with the support of the former Soviet Union in the 1950s. The company copied and introduced not only automobile making technology but also organization and administration systems from the former Soviet Union. Such cooperate structures are called “DA ER QUAN” . The “DA ER QUAN” system encompasses all aspects of manufacturing form parts production to final assembly under one management systems. However the “DA ER QUAN” structure has been changing due to economic reforms in China which has led to foreign investment, technology transfer and the introduction of new car model “JIE FANG” to their product lines.
The Chinese government focused on Jilin/Changchun as its main automobile manufacturing area. Recently, The Chinese government has focused on Jilin/Changchun for changing the “DA ER QUAN” system by introducing a more conventional network of independent parts suppliers. Jilin is different from the Shanghai area in that it is less developed, having much fever industry support systems, especially in automobile parts production. This caused Jilin to aerate unique divisions of labor in regard to parts supply.
Compared to the Shanghai area with its independent parts suppliers, less developed Jilin has had to create its own liked yet separate network of parts suppliers. These main suppliers have also created their system of parts subcontractors by changing from FAW Loudong Enterprises General Company to FAW Sihuan Enterprises General Company.
