The automotive supply chain

What is the automotive industry and who are its participants?

In general, an average car has roughly 30,000 indivisible parts. The vast majority of these simple parts are assembled into a larger, complex sub-unit and then different sub-units are put together to form an even larger and more complex unit to create one of the main modules of the car.

We can take a simple screw, a PCB, or a complete engine as components for car manufacturing, depending on which stage of car production they are produced and installed.

Accordingly, some suppliers produce the simplest materials that cannot be broken down into smaller parts, and some purchase different parts from raw material suppliers to create a larger part by assembling them. And, of course, car manufacturers are using these to build vehicles.

The participants of the automotive supply chain are named accordingly.

Car manufacturers are known as OEMs, suppliers who supply directly to OEMs are referred to as Tier 1, suppliers who supply to Tier 1 are referred to as Tier 2, and so on.

The group of businesses involved in the design, development, manufacturing, marketing, and maintenance of automobiles is known as the automotive industry. Which is one of the most profitable industries in the world.

According to recent estimates, there are roughly 1.475 billion vehicles worldwide, including cars, trucks, and SUVs. With 8,2 billion people on the planet, this translates to approximately one vehicle for every five people.

Every year, 60-80 million cars are produced worldwide. That’s the same as 165,000 -220,000 vehicles every day.

Let’s see  some statistics

Revenue of leading automakers worldwide as of May 2024

Source: statista.com

MarkLines Co., Ltd. has compiled an FY2023 ranking of automotive parts suppliers in terms of sales (comparing the sales of each company’s automotive businesses in U.S. dollars). The top five companies are Bosch, Denso, ZF, Hyundai Mobis, and Magna, in that order.

Source: MarkLines Co. Ltd.