Volkswagen may buy steel in China to cut purchasing costs

Forbes.com

FRANKFURT (AFX) – Volkswagen AG may buy steel in China in response to surging raw material prices, Frankfurter Allgemeine Zeitung said in a report to be published tomorrow, citing Franciso Javier Garcia Sanz, management board member in charge of purchasing for VW.

‘We are seriously thinking about getting steel from China,’ Garcia Sanz said, adding the company is already in talks with Chinese steelmakers.

As part of the company’s ForMotion cost-cutting programme, Garcia Sanz hopes to cut production costs by 1 bln eur this year and by an additional triple-digit mln eur amount next year.

Volkswagen may also form a ‘steelpool’, meaning it will purchase steel for its suppliers, thereby raising order volumes and cutting costs, he said.

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