PARIS - Renault is about to start naming its most trusted suppliers. They will get long-term contracts in exchange for lower prices.
'We will likely have about 150 Optima suppliers eventually,' said Jean-Baptiste Duzan, Renault vice president for purchasing. 'About 30 will be chosen in early 1998.'
A new purchasing policy was explained to suppliers at a meeting in Paris. The Optima program is a new step in a three-year program to save FF20 billion ($3.3 billion). Chairman Louis Schweitzer wants half the savings to come from lower costs of purchased components.
Last year, Renault cut its purchasing costs by 8 percent. Renault spent FF55 billion with automotive suppliers.
'We want to go further with a reduced number of suppliers,' explained Duzan. Innovation, global presence and capacity to cut costs will be the key elements for choosing a supplier.
'We target a long-term relationship with Optima suppliers,' he said. 'For Renault, it's the right way to benefit from savings. For the suppliers, it means they can work with Renault for an undefined period of time.'
Renault currently has 500 Tier 1 suppliers. Most will continue to supply Renault, but most will not be in the Optima program.
The purchasing department divides the car into 37 main subsystems, and 'there will be two or three Optima suppliers for each one,' said Duzan.
'We will be very careful with our choice,' he said. 'We will go slowly. We do not want to make mistakes, so we need to have a global overview.'