Finding a Place in the Automotive Supplier Hierarchy In the Year 2000 and Beyond

Abstract

The global automotive supplier industry is undergoing a major restructuring and consolidation. The defining characteristics of the industry in the year 2000 and beyond will be fewer suppliers at all levels of the supply chain, but especially among the ranks of direct suppliers to the motor vehicle manufacturers. Direct suppliers will consist primarily of systems integrators that are capable of designing, manufacturing and delivering complete modules to motor vehicle assembly plants. Many of the systems integrators will have global reach. Since there will be relatively few systems integrators, suppliers that do not become an integral part of a systems integrator must either carve out a position as an indirect supplier in the supplier hierarchy that evolves or leave the business. In order to remain part of the automotive supplier base in the long term all suppliers must decide where they will best fit in the supplier hierarchy and determine what they must do to survive the transition and position themselves to thrive after the restructuring and consolidation of the supply base is complete. In this paper the options available to Canadian suppliers and the strategies that some of them are following to position themselves in the year 2000 and beyond are explored. The objective of the research is to identify some of the elements of successful strategies for suppliers at various levels in the supplier hierarchy.