The auto parts industry is a wide-ranging industry that encompasses the supply of all components needed to build an automobile. This includes the engine, transmission, chassis, tires, and even the seat springs. In addition, it provides accessories, which are sold after the vehicle is purchased.
The market is currently under pressure from global competition and rising costs. As a result, many customers demand lower-quality products. Also, many parts suppliers are in financial distress. Many analysts predict that only a handful of major suppliers will survive by the end of the decade.
One of the largest auto parts manufacturers in the world is Visteon, a supplier with a range of products. The company was spun off from Ford in 2000, and in 2006 had sales of $11.4 billion. It offers a wide variety of products, including cockpits, electronics, and lighting.
The automotive parts industry is broken down into nine major product groups. These are the engines and parts, transmissions and power trains, automotive lighting, tires, body panels, chassis, controls, and accessories. Each product grouping has a percentage share of the sector’s shipments. For example, the automotive lighting category represents 14 percent of the total.
Traditionally, the auto parts industry has been dominated by Japan. Today, it is being impacted by the rise of the emerging economies, which are growing at a faster rate than the developed industrial nations. Nonetheless, Japan remains the world’s number one producer and supplier of autos and auto parts.
A report by Ward’s Auto World states that the auto parts industry has a long history. In the early 1900s, independent companies supplied the auto industry. These firms were physically closer to their customers. However, these days, suppliers are often more than a day’s drive away.
In the past, the auto parts industry primarily consisted of jobbers, wholesalers, and distributors. But today, the number of auto parts suppliers is decreasing as manufacturers consolidate or build larger systems.
According to an industry forecast, fewer than 100 of the world’s biggest auto suppliers will still be in business by 2010. In addition, only 50 of these will be system integrators that work directly with vehicle manufacturers.
In addition to the United States, the largest exporter of auto parts is Mexico. Canada is the second largest exporter, and Japan is the third. Both of these countries are partners with the United States in the North American Free Trade Agreement.
In 2006, the U.S. import and export trade deficit increased to $58.9 billion, up from $49.9 billion in 1999. Imports and exports grew at an average rate of 12.7% and 1.73 percent, respectively, between 2001 and 2006.
Despite the challenges in the auto parts industry, it is not the only market to experience difficulty in the early 21st century. The automotive supply industry is facing intense pressure from global competition, and more than a third of the auto suppliers are in financial distress. Several automakers have bought out suppliers to control their parts. Some suppliers have also joined forces to form larger companies.