CSM Worldwide Inc., has issued a clear message of caution to auto suppliers that focus solely on the North American market. At their annual Global Outlook briefing to an audience of supplier executives, CSM analysts stressed the need for suppliers to gain business on global platforms and expand their footprint to a global scale in order to survive and succeed in the current market.
Go deeper with GlobalData
Automakers that have been slow in ramping up global platforms and rationalizing these on a global scale are now considered lagging. Lower tariffs and the expansion of WTO, combined with global competition, have driven OEMs to seek increased economies of scale through platform consolidation on a global scale.
“From a supplier’s point of view, global platforms provide opportunities to expand to new markets and the possibility to quote upon a full range of programs,” said Michael Robinet, vice president, Global Vehicle Forecasts. “Those suppliers who are flexible and working on global platforms are able to react to currency shifts and limit negative financial exposure.”
Exposure to low-cost production locations will be increasingly vital towards the end of this decade. Compared to other OEMs such as DaimlerChrysler and Ford, who will have less than 30 percent of their production in low-cost locations by 2009, Hyundai will eclipse a rate of 90 percent production in Central Europe, India, China and other low-cost Asian locations.
To combat this, competitive OEMs such as General Motors are working with affiliates such as Suzuki, GM-Daewoo, AvtoVAZ and Fiat to increase their product reach and gain access to low-cost production locations. Japanese OEMs will also be addressing their exposure by increasing production of several offerings off global platforms in Central/Eastern Europe, China, Thailand, India, Brazil and S. Africa.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataAs globalization of the manufacturing base remains a hot-button issue, suppliers are facing increased pressures to resist investments outside of the United States. To continue to remain viable, suppliers must look to global platforms as a mechanism to expand their geographical footprint and limit financial risks.
