Automobile Parts Manufacturing Industry Profile

The US auto parts manufacturing industry consists of about 4,000 companies with combined annual revenue of about $180 billion. Large companies include ArvinMeritor, Dana, Delphi, Lear, Visteon, and the automotive division of Johnson Controls.

Worldwide, the auto parts manufacturing industry generates about $1 trillion in annual revenue. Leading auto parts manufacturers based outside the US include Robert Bosch and Continental (Germany), DENSO and Aisin Seiki (Japan), Faurecia (France), and Magna International (Canada).

COMPETITIVE LANDSCAPE

Demand for auto parts is driven by new car sales, which are strongly affected by interest rates, and by the replacement market. Company profitability depends partly on the difficulty of manufacturing products and partly on demand volume, since many costs are fixed. Small companies can compete successfully by focusing on a small number of products or some highly technical ones. The industry in the US is capital-intensive: average annual revenue per employee is more than $350,000.

The structure of the industry is complex, with most smaller companies (referred to as "tier 2" and "tier 3" suppliers) selling parts to larger suppliers (referred to as "tier 1" suppliers), which in turn sell component assemblies or modules to car and truck assemblers such as GM and Ford - collectively called OEMs.

PRODUCTS, OPERATIONS & TECHNOLOGY

Major product categories are transmission and power train components (20 percent of industry revenue); engines and engine parts (15 percent); and metal stamping of body parts and trim (15 percent). Other products ...