文档介绍：Transfer
pricing
in the
automotive
industry*
Production capacity
management and transfer
pricing economics
For years the mantra of automotive PCM occurs whenever a new plant opens, Transfer pricing economics is a
production has been to supply customers or an existing plant expands, contracts bination of micro- and
with “high quality, low-cost, innovative or closes. And while PCM begins in macroeconomics. Properly applied, it lays
products.” As emerging markets have operations or strategy departments, out the entire value chain of activities of
developed into high quality producers in anizations probably have the a corporation on a location by location
addition to low-cost centers, automotive most to offer when evaluating the benefits basis, in order to assess the most equitable
OEMs have moved production into these of PCM. Applying the principles of transfer possible arrangements between disparate
areas in search of more customers and pricing economics, anizations entities within a corporation. Then it
greater cost savings; suppliers have can enhance the ess of pares the circumstances of each entity
naturally followed. capacity management movements in the and assigns target profits to each location
following ways: based on its particular activities, assets,
While OEMs have regularly increased sales • Evaluating and establishing operational and risks.
volumes for vehicles worldwide, global infrastructure;
production capacity growth has continued • Developing “new plant” metrics; and
to outpace customer demand. In recent • Tax considerations and other costs.
years the utilization of that global capacity
has e the focus of attention. In 2005
there were 6 major plant closings around
the world, but 18 new plants came on
line during the same period. This trend
is expected to continue over ing
years1 [see chart]. Production Capacity
Management (PCM) is clearly required
to ensure that the costs of production
enhanc