Geely Automobile, which successfully acquired the world-renowned brand VOLVO, has become a “star” in the automotive industry. Recently, Geely Automobile cooperated with Ningbo International Automobile City and threw out an olive branch of industrial cooperation, which attracted the attention of local auto parts manufacturers.

It is understood that Zhejiang Geely Holding Group and Ningbo International Automobile City signed a strategic cooperation agreement recently. More than 300 auto parts suppliers in Ningbo International Automobile City officially entered the list of Geely Automobile's new product development suppliers. This is the first big marriage between Ningbo auto industry auto parts and parts suppliers, which will drive Geely Automobile to purchase more local parts and improve the efficiency ratio of the whole vehicle and parts.

Geely prioritizes local companies into the procurement supply chain
Geely Automobile is a complete vehicle manufacturer with more than ten brands of passenger cars from Geely Panda and Emgrand EC7 and more than 500 4S stores and nearly 1,000 service stations of Global Eagle, Dorsett and Shanghai Yinglun. . Its Ningbo base has an annual production capacity of 600,000 complete vehicles, 800,000 engines and 800,000 transmissions. Ningbo International Automobile City is a distribution center for auto parts supply. It has attracted more than 300 auto parts manufacturers and buyers to settle in. The resource platform built by it ensures the smooth flow of information between auto parts and parts companies. The docking service has also greatly reduced the workload of the procurement and supply links of both parties. The complementary positioning of the two sides provides a good foundation for this cooperation.

After in-depth negotiations, the two sides reached a cooperation agreement. Geely Automobile will hold a press conference and matchmaking meeting for the vehicle promotion meeting or the complete vehicle parts and vehicle parts demand in Ningbo International Automobile City on a regular basis (about once a quarter). Geely Automobile will give priority to Ningbo International Automobile City to provide a list of auto parts purchases for complete vehicle and 4S stores. Geely Automobile's procurement of spare parts for the manufacture of the whole vehicle and the supply of parts for 4S shop, under the condition of meeting the requirements, the priority of Ningbo International Automobile City is included in the procurement supply chain of Geely Group. This means that through the “matchmaking bridge” of Ningbo International Automobile City, Ningbo auto parts manufacturing enterprises have set up the development “Express Train” of Geely Group.

As a support, Ningbo International Automobile City organizes manufacturing enterprises to conduct procurement, docking, negotiation and implementation of manufacturing supply according to the quality standards, delivery period and after-sales service guarantees required by Geely Automobile. Ningbo International Automobile City will, according to the contract of supply contract, recommend the corresponding products to Geely Automobile's recommended manufacturing enterprises, and in accordance with the standardization management requirements of Geely Automobile, it is responsible for the overall management of the manufacturing enterprises recommended for the Geely Group.

Expanding the driving industry's driving effect on local industries
The cooperation between Geely and Ningbo International Automobile City will expand the driving effect of the whole vehicle industry on the local industry. This is the expectation of An Conghui, vice president of Geely Holding Group.

From the perspective of the internationally developed automobile industry base, the one-yuan benefit of an automaker can drive the 7 yuan benefit of the peripheral parts industry. However, the profit ratio of Zhejiang Geely Automobile Co., Ltd. located in Beilun and the surrounding parts industry stayed at the level of 1 to 4. "Geely's purchases in Ningbo accounted for only 3% of its group's internal annual purchases in 2004, and it is currently rising to around 15%. The upward trend is good, but there is still potential to be tapped." An Conghui said.

In fact, in addition to the engine, the auto parts required by Geely Automobile are almost all produced in Ningbo, such as chassis, seals, gearboxes, wheels, bearings and other components. The automobile and parts industry has developed into one of the five key industries in the city. In recent years, the scale of the industry has been expanding, the development trend of industrial clusters is obvious, and the production conditions, research and development and management levels of enterprises have been significantly improved. Last year, there were 612 auto parts enterprises above designated size in the city, with a total industrial output value of 34.434 billion yuan, an increase of 12.1% over the previous year.

An Conghui admitted that the space for further cooperation between Geely Group and Ningbo auto parts industry is very large. “We signed a contract with Ningbo International Automobile City to launch a new round of supply chain integration in Zhejiang. The purpose is to expand the proportion of local procurement, reduce logistics costs and procurement risks, form a healthy development chain, and move Geely to the local market. The pulling effect of peripheral industries such as auto parts has increased from the current 1 to 4 to 1 to 7."

For this cooperation, Ningbo International Automobile City Development Co., Ltd. believes that this is a breakthrough. “This is a win-win innovation. Geely handed over the parts procurement standard to us. We screened qualified suppliers for Geely, reduced the purchase cost of Geely, and increased the transaction volume of the Auto City.” Ningbo International Automobile City Zhou Zhongqing, general manager of Development Co., Ltd. said, "The two sides will work together to build a global procurement center for auto parts."

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