BYD and SAIC pressure their suppliers to reduce prices in 2025

According to industry insiders, BYD and SAIC are trying to negotiate lower parts prices from their suppliers, aiming to reduce costs by 10% starting January 2025. This indicates that the price war in the Chinese automotive industry is getting serious.

The report from BYD stems from an email sent by the president of BYD Group and CPO of passenger cars. He says that suppliers should reduce their prices by 10%. The Maxus division of SAIC is doing something similar: inviting its suppliers to reduce costs by 10% and even proposing several strategies.

Firstly, it suggests that suppliers seek out better raw material deals and reduce material usage through new production technologies. Secondly, improvements in the manufacturing process can reduce waste and improve efficiency.

SAIC also wants to see suppliers implement techniques such as value analysis and value engineering (VAVE), which will give suppliers' own advantages and collaborate with SAIC in design to optimize parts even further.

Logistics is another way to reduce overall costs, and Maxus wants its suppliers to find ways to improve the efficiency of shipments and reduce the cost of packaging.

According to BYD, negotiating lower prices from suppliers is a standard procedure in the industry. It believes that all parties involved should seek to reduce costs through large-scale mass procurement.

Source 1 | Source 2