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Auto parts market barrier
Dec 20, 2018

(1) Entry barriers for the procurement system of complete vehicle parts

The pyramidal matching relationship between OEMs and component companies has formed a relatively fixed interdependence between vehicle and auto parts companies, and their cooperation relationship is relatively strong. It is more difficult for new enterprises to replace the original supporting suppliers.

(2) Quality system certification, process review and product approval barriers

Host manufacturers must strictly select and control parts and components companies. First, component companies must establish an internationally recognized third-party quality system designated by the host manufacturer, such as ISO/TS16949. Second, the host manufacturer must also cover all aspects of the component supplier (eg QCLDM-Quality/Cost/Logistics/R&D/ Five aspects of management) conduct strict scoring audits and conduct on-site manufacturing process audits; finally, each of the ancillary products undergo a rigorous quality audit and undergo a prolonged product installation test.

(3) Technical barriers

Auto parts manufacturers have formed unique production processes in the production process. These production processes have unique competitive advantages in improving product performance, product reliability, production efficiency and cost reduction. In addition, the host supporting market requires suppliers to have strong new technology and new product development capabilities, and actively participate in the simultaneous development of product manufacturers.

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