Skip to main content

How are mid-size auto parts manufacturers addressing today's biggest challenges?

Trends in 2017's Automotive Industry

In the United States alone, auto parts manufacturers account for a combined $250 billion in annual revenue. These companies manufacture a wide range of automobile parts and components for engines, transmissions, power trains, electronics, braking systems, steering and more. While consolidation of car companies has resulted in a smaller number of large suppliers, there’s still a sizeable market for small and mid-sized manufacturers. Globalization, self-driving cars, expansion into new markets, and an increased demand for auto parts due to higher numbers of older vehicles still in operation – the average car on the road today is more than 11 years old, which means more need for repairs and parts – are all leading to growth in this industry.

Need for cost reduction

A prevalent issue facing the mid-size automotive industry right now is the need for cost reduction. Manufacturers are seeing significant downward pressure on pricing from their automaker customers, forcing businesses to get creative in the search for ways to reduce costs and increase productivity and efficiency.

Reducing costs through technology

Many are using technology to improve efficiency, reduce manual labor, and reduce waste. Some examples include:

  • Modern ERP systems that connect all aspects of the business from receiving of raw materials through inventory to purchasing and finance.
  • CAD integration with business systems such as ERP
  • 3D printing, which can reduce costs while maintaining or even increasing component complexity
  • Advanced analytics software, paired with machine and ERP data, for understanding and predicting production failures, reducing downtime, and looking at demand over time
     

Reducing costs through supplier contracts

Negotiating terms and prices with major suppliers is another common approach to reducing costs for automotive parts manufacturers. Many are turning to progressive decrease contracts, in which suppliers agree to lower costs as volume increases. Others are increasing supplier efficiency with innovations like workplace automation and vendor portals, which integrate into the business’ ERP systems.

auto parts trends for 2017

Reducing costs by streamlining logistics

It’s important for mid-sized auto parts makers to minimize their inventories both of raw materials and of finished products. They can do this by making full use of their computer systems, such as ERP, for functions such as advanced planning and scheduling, mobile inventory management, and supply chain integration through vendor and customer portals.

Finding new markets

There are significant similarities between the skills and equipment needed for auto parts manufacturing – specifically the processes of plastic injection molding -- and the skills and equipment needed for certain consumer products and the aircraft industry. Customer diversification can provide long-term stability for small and mid-size auto parts manufacturers.

Source: Dun & Bradstreet’s First Research

703-444-2500
+43 1 319 15 19
+49 721 96 72 30
703-444-2500
+38 061 21 37 855
+420 241 931 544
+31 (0)85 3033 555
+421 903 717 980
+55 - 11 5054 - 5500
+852-2793-3317
+91 77559 04373
+62 (21) 293 19 366
+603-56124999
++94 76 666 9070
+66 81 6297375
+359 2 423 61 56

Contact

Your consent can be withdrawn at any time by sending an email to [email protected] . We assure you that we will treat this information as strictly confidential and that it will be used by abas Software AG and abas partners only (privacy policy).

North American Headquarters

703-444-2500
abas USA
45999 Center Oak Plaza
Suite 150
Sterling, VA20166

North American Headquarters

703-444-2500
abas USA
45999 Center Oak Plaza
Suite 150
Sterling, VA20166

Infocom Ltd.

+38 061 21 37 855
bul. t. Shevchenko, 56
Zaporozheye
69001

amotIQ sro

+420 241 931 544
Belnická 603
252 42 Jesenice u Prahy

ABAS Business Solutions Nederland BV

+31 (0)85 3033 555
abas Netherlands
Beilerstraat 24
9401 PL Assen

amotIQ sro

+421 903 717 980
amotIQ sro
Palarikova 36
900 28 Ivanka pri Dunaji

SHP Informática Ltda

+55 - 11 5054 - 5500
SHP Informática Ltda
Alameda dos Jurupis, 452, 7°andar - Conjunto 73/74
Sao Paulo - SP 04088-001

abas Business Solutions Limited

+852- 2793-3317
abas Hong Kong
1621, New Tech Plaza
34 Tai Yau Street
Hong Kong

abas Force India Pvt. Ltd.

+91-77559-04373
abas India
303, Aspiro Complex, Opp. Thyssenkrupp,
Pimpri Stn. Road, Pimpri,
Pune 411018

PT. abas Information Systems

+62 (21) 293 19 366
abas Indonesia
11620 Taman Aries, Jakarta barat Jakarta
Grand Aries Niaga G1-2H

Synchro RKK Sdn Bhd

+603-56124999
abas Malaysia
Sunway Geo Avenue,
Jalan Lagoon Selatan
Sunway South Quay,
Bandar Sunway
Subang Jaya Selangor 47500

Providence Global Pvt Limited

+94 770415387
Providence Global Pvt Limited
752/1
Dr De Silva Mawatha
Colombo 09

Wisdom Information Systems

+66-29340451/52/53
Wisdom Information Systems
208/5 Ladprao Soi 126
Bangkok 10310

abas Бизнес Сълюшънс България ООД

+359 2 423 61 56
abas Бизнес Сълюшънс България ООД
жк. Младост 1А, бл.553А, офис 1
1729 София