Companies in this industry manufacture automobile parts, including transmission and power train components, engines and engine parts, body parts and trim, electronics, braking systems, and steering and suspension components. Major companies include American Axle & Manufacturing, BorgWarner, Dana, Lear, Tenneco, Visteon, and the automotive division of Johnson Controls (all based in in the US), along with Robert Bosch and Continental (Germany); Delphi Automotive PLC (UK), DENSO and Aisin Seiki (Japan); Faurecia (France); and Magna International (Canada).
Demand for auto parts is driven by new car sales, which are strongly affected by interest rates, and by the replacement market. Company profitability depends partly on the difficulty of manufacturing products and partly on demand volume, since many costs are fixed. Small companies can compete successfully by focusing on a small number of products or some highly technical ones. The US industry is concentrated: the 50 largest companies account for more than half of industry revenue.
Products, Ops & Technology
Major product categories for the US industry are transmission and power train components, engines and engine parts, and metal stamping of body parts and trim, each of which accounts for about 15% of industry revenue. Other products include electrical and electronic equipment (10%); seating and interior trim (10%); brake systems (5%); and steering and suspension components (5%), as well as air conditioning systems and carburetors, pistons, and valves. Parts manufacturing plants are often located close to the assembly plants of the car companies, usually within 100 miles.