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Posts Tagged ‘automotive suppliers’

Analysis: Quake Could Reorder Auto Industry

Analyst says crisis could lead to 30% cut drop in auto production.

by on Mar.25, 2011

Building a solid relationship with suppliers can be as critical as building the right car, says a new study - which also found that Toyota's supplier relations have been suffering.

Analyst statements that auto production could drop by as much as 30% as part shortages become a huge problem shows that automakers may need to rethink their strategy in choosing suppliers.

IHS Automotive said Thursday that the crisis surrounding the mega earthquake and tsunami that rocked Japan on March 11 could reduce global automotive output by nearly a third or 100,000 vehicles in coming weeks.

The crisis raises some major issues including:

  • Should automakers require suppliers to have multiple locations capable of producing critical parts?
  • With the Japanese automakers facing the most critical parts shortages, could the crisis reshape the automotive landscape, leading to huge shifts in marketshare?
  • Will automakers raise prices as supplies of new cars begin to dwindle?


Creaking Auto Supply Chain Ready for “Implosion”

As many as 500 suppliers may need to go to avert catastrophe.

by on Mar.12, 2009

As many 500 of the 1,700 automotive suppliers could fail in 30 to 90 days, an "implosion" that could bring assembly lines to a standstill.

As many 500 of the 1,700 automotive suppliers could fail in 30 to 90 days, an "implosion" that could bring assembly lines to a standstill.

Nearly a third of the automotive industry’s suppliers could be forced to consolidate – or to go out of business entirely.  Without this shake-up, says a leading specialist in corporate restructuring, the entire supply chain could collapse, bringing automotive production to a screeching halt.

The crisis on the parts manufacturing side of the business is even more severe than what has happened on the auto assembly side, says Laura Marcero, a partner with Grant Thornton LLP, even considering the potential collapse of both General Motors Corp. and Chrysler LLC.

“We believe 30 to 40 percent of all suppliers are at high risk…and must come out of the base,” Marcero declared during a meeting of the Automotive Press Association, on Thursday.”

Suppliers have largely run out of cash, Marcero noted, as their customers – carmakers like GM, Toyota and Mercedes-Benz — have been forced to slow their assembly lines and curtail parts purchasing.  Making matters worse, banks and lenders have clamped shut supplier credit lines.