Auto parts manufacturers supply the raw materials, components and assemblies needed to manufacture automobiles. Their offerings can either be original equipment parts (OEM) used during car production, or aftermarket replacements or accessories purchased separately by consumers.
Magna International and other major providers offer comprehensive vehicle systems to their customers, while others specialize in specific car components like closures, electronics, interiors and exteriors, bodies and chassis or seating.
Original equipment manufacturers (OEM)
Automotive part and accessory production has evolved substantially over time. Long gone are OEM-dealer relationships; consumers now purchase parts directly from independent suppliers. This shift has altered how companies compete in this market as offering high-quality products at reasonable prices has become key to remaining viable in business.
Magna International and Karl Benz both used screws from this industry for their inventions, and Magna also creates entire vehicle systems from this sector. Magna operates worldwide – even Antarctica is covered.
Auto parts manufacturers require both internal and external crew members in order to successfully run their businesses, including workers, managers, supervisors, procurement specialists, accountants and transportation and logistics service providers. Their external crew consists of retailers such as AutoZone, Genuine Parts Advance Auto CSK Auto; jobbers who act as intermediaries between wholesale distributors and retail operations; as well as car dealer service departments and repair shops.
Aftermarket
The aftermarket refers to a network of distributors offering replacement parts, equipment and upgrades that are typically sold directly to consumers, dealers or repair shops. Common examples of durable goods found on sale in the aftermarket include razor handles with disposable razor blades designed specifically to fit these handles; printer cartridges; and car stereos.
Aftermarket parts manufacturers specialize in creating aftermarket versions of OEM designs to increase functionality, efficiency and strength for cars, trucks and other vehicles. Their aftermarket offerings often cost less while meeting or exceeding quality requirements. Many reverse engineer the OEM designs to improve functionality, efficiency and strength for aftermarket versions.
Aftermarket parts are typically targeted at DIYers and garages for light truck applications, and are commonly available. The aftermarket includes components for driveline & powertrain, interiors & exteriors, electronics, body & chassis seating & wheels & tires components of vehicles. While an important segment of the automotive industry and major revenue source for auto part manufacturers, its growth has been affected by pandemic events which reduced travel and discretionary spending.
Light trucks
Light trucks, also referred to as light commercial vehicles in Europe, have payload capacities under 10,000 pounds and typically include pickup trucks, SUVs, crossovers and minivans.
Ford Motor Co.’s sales year to date through November totaled 96% of light truck sales, an increase from 90% a year ago as it reduced car offerings like the Fusion. Resurgent compact pickup sales for Maverick were also on an uptick.
Numerous auto parts companies specialize in light truck products. Tenneco, for instance, is a global auto parts supplier offering Clean Air and Ride Performance technology solutions to light vehicles, medium & heavy-duty trucks, off-highway equipment and aftermarket markets. BorgWarner Inc of Fort Wayne Indiana manufactures engine and exhaust system products as well as fuel systems, power distribution networks, electrical cooling and power cooling systems which have been sold across 80+ countries worldwide.
New vehicles
Once upon a time, auto manufacturers produced all of the parts used in their vehicles themselves. Today, most manufactures instead contract with separate companies to design and produce parts for them before branding and selling these replacements to the public.
Leading suppliers are investing heavily in technologies that make cars environmentally-friendly, economical and safe. Their strategies involve improving or replacing existing components such as anti-lock braking systems, electronic fuel injection and automatic dimming mirrors while creating entirely new concepts such as hybrid motors.
COVID-19 caused manufacturing and car sales to decrease dramatically, leading auto parts factories’ revenue to decrease accordingly. But recently the industry has seen its revenue rebound as consumers upgraded their vehicles with latest models, necessitating special parts from auto suppliers for steering systems, chassis suspension systems, energy management and body systems among other components needed for these purchases.
