Plans to double current LCC sourcing rate of 20%.

Speaking at the Central & Eastern European Automotive Forum, yesterday, (22nd Oct) Jérôme Vinot Préfontaine, PSA's purchasing director for Central Europe shared some information on PSA's purchasing policies. The fourth point of PSA's "back in the race" plan designed to step up PSA's recovery is to enhance competitiveness in Europe. With regard to purchasing, Mr  Préfontaine described three actions that he is working on in Trnava in order to contribute to this goal.

First is to increase the rate of low cost countries (LCC) purchasing. Second is to reinforce PSA's  localisation studies in order to get the best possible supplier localisation with the third point to, where necessary, work with  new suppliers. Mr. Préfontainer identified the current LCC rate at 20%, and expressed a desire to double this rate. He pointed out that this would clearly not be done from day one, but that all new projects are now targeted with a much larger rate of LCC content but also  to work on the serial re-localisation of components.

Central Europe has been targeted as the main axle of PSA's renewed purchasing strategy but other locations are Portugal and Morroco. The region is important not only because PSA have two plants in Slovakia and Czech Republic but also due to the five plants that are less than 1,000km from Prague in which PSA have investment and product plans that will lead to some 1.3 million cars produced there in 2019, an increase of 40% compared to 2013.

While highlighting the future need for developing new relations with the original equipment suppliers (OES) based in central Europe, Mr Préfontaine did make the point that the purchasing team in Poissy, close to Paris, would still lead the purchasing strategy but that, locally, they would have to have a stronger input, firstly to develop deeper business contacts with current suppliers based there but also  to propose to Paris some new opportunities with suppliers that wish to work with its factories. Mr Préfontaine added that PSA would, of course, target  suppliers who currently work with the other OEMs, led with a clear view of the total landed costs in PSA's factories.

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