New components equal new suppliers

Automotive Industries,  Nov, 2001  

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Supplier consolidation is one of the many terms the industry throws around. While it has been used to illustrate the ferocious nature of the automotive business, it does not tell the whole story. That is, while many commodities experienced a reduction of suppliers during the last five years, some also experienced an increase. And even some of the components that featured a supply base reduction also featured new suppliers.

The accompanying chart shows a list of some components that have either experienced supplier reduction or supplier growth. While the consolidation has been dramatic in some areas (door trim lost 32 percent of its supplier base), other components have seen supplier growth -- suppliers of HVAC systems saw a 50 percent increase in number and keyless entry transmitters saw a 36 percent jump in suppliers (these numbers reflect new competitors, not JVs or acquisitions).

What's the bad news for the new sup pliers? Most don't yet have significant market share. With the exception of keyless entry (a component not by coincidence, that has seen installation growth in the last five years), all of the new suppliers for these components have limited market share. But as the saying goes, some is better than none.

CSM Worldwide

www.csmautu.com

GROWTH OF NEW SUPPLIERS IN N.A. MARKET

                         No. of Suppliers to the
                          North American Market
                           1996          2002          New suppliers
                                                   (between 1996 - 2002)

Brake Assembly              24            18                 2
Door Trim                   28            19                 1
Bumper Fascias              25            20                 2
Suspension Arms             44            41                 7
HVAC Systems                 8            12                 4
Keyless Transmitters        10            14                 4
Fuel Tanks                  20            15                 1



                      New suppliers' share
                         of 2002 market

Brake Assembly                3.5%
Door Trim                     1.0%
Bumper Fascias                1.0%
Suspension Arms               7.5%
HVAC Systems                  5.8%
Keyless Transmitters         25.0%
Fuel Tanks                    3.5%

Source: CSM Worldwide/www.csmauto.com

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