The Labor Division Between Vehicle And Auto Parts Company is Becoming More Specialized

The continuous division and evolution of labor in different segments of the automotive industry has evolved to create a specialized division of labor in the automotive industry. With the development of specialized production of automotive industry, the labor division becomes constantly specific and deepened in the industry and individual company. A car product is completed by a number of companies; each one provides some kind of different process or technical service.

The specialized manufacturing system in overall process of vehicle product promoted the change and evolution of the automotive industry, and pushed the whole industry’s development. During this process, the number of specialized auto parts Tier 1/2/3 suppliers has increased significantly. The specialized industrial chain has been extended.

In terms of industry status, in the past, auto parts company used to subordinate in the automotive industry chain, which mainly to provide support and service for the automotive OEM company. As the adjustment of strategic pattern of the whole automotive industry and the promotion of global purchasing, the labor division between OEM and auto parts companies becomes more specialized.  

The automotive OEM company will committ to the vehicle development, assembly technology, key components’ R&D (such as engine and transmission), while it will entrust to the auto parts manufacturers a large numbers of production, research and development activities which used to finish inside their own company. Auto parts company is based on the specialized manufacturing to realize the mass production and meet the needs of global similar company.

The auto parts companies take over the manufacturing and R&D mission from automotive OEM company, which make them could go deeply in the vehicle R&D and manufacturing process; no longer limite to traditional manufacturing with samples or drawings, while response to all the duty of product design, manufacturing, inspection, QC, and timely delivery.
Therefore, an auto parts company with a good reputation and capacity to R&D, manufacturing, and assembly, could be a good tier 1 supplier to the OEM, otherwise, the other auto parts company which can’t reach the above standards, just would be in the lower level.

News: resource: askci.com