Car parts makers reeling under cost pressure

KPMG said parts makers have been pushed into bankruptcy or near it as big car makers, faced with slower sales, demanded component price cuts averaging 10%. In its industry survey, KPMG also found parts makers suffering from rising inventories and excess capacity as production slowed or stopped on certain product lines. The consultants said China's 4,700 car component suppliers were not in a position to force their suppliers to lower costs because the price of plastic and metal was rising and much of their raw material, which accounted for 80% of operating costs, was imported.