Cost Control Analysis Base On New Magotan In FAW-VW

To meet the needs of the China Automobile market, a lot of new models comeout everyday. The new Magotan of FAW-Volkswagen Automotive Limited Companysuccessfully launched in2011. Although the new Magotan has made a sale record ofmore than100,000volumes each month, it is still far behind that of new Passat,which is produced by Shanghai Volkswagen. In the automobile manufacturingindustry, if a car wants to take part in the price war in the market, it must havesufficient advantages regarding of material cost, which directly affect the enterprise’score competitiveness and market sales performance. And the material cost advantagewill influence core competition and market behavior of enterprise. Several facts showthat who can control the whole cost better, who will have excellent behavior indomestic automobile industry. The paper makes further researches on cost control ofnew Magotan as follows:First, the new Magotan rows on the third grade in the B class domestic carmarket, according to it technically and sale performance. The paper puts forward itsquestions of cost high.Second, the paper separates cost into three parts which supplier, manufacturerand dealer company combined with Mr. Potter value chain theory. To find whichaspect leads to the high material cost.Finally, the paper finds solution to solve the cost high question through thewhole product process. To further discuss how to optimize material cost and findpotential point.