What are automotive suppliers?

Basic knowledge What are automotive suppliers?

2022-08-14 Source: Svenja Gelowicz

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Who are the top automotive suppliers in Germany and which are the largest worldwide? Definition, examples, trends and industry knowledge — simply explained and at a glance!

Automotive suppliers range from small and medium-sized companies to large corporations such as Bosch or Conti: Definition, industry knowledge, trends and top 100 ranking.(Source: Brose) — Automotive suppliers range from small and medium-sized companies to large corporations such as Bosch or Conti: Definition, industry knowledge, trends and top 100 ranking.
(Source: Brose)

Automotive supplier are defined as: Companies that manufacture goods that are used in the production process of an automobile or become part of an automobile, such that they supply these goods directly or indirectly to an automobile manufacturer, synonymous with Original Equipment Manufacturer (OEM).

These goods can be individual components, such as screws, or entire assemblies, such as pre-assembled door modules. Automotive suppliers are therefore part of an automotive supply chain.

Examples of individual components are screws, bearings, seals or metal sheets. Assemblies in turn are, for example, the E axis. Bosch presented this module at the IAA.

Alexander Fraß, author of “Automobilzuliefererindustrie in Deutschland” (Automotive supplier industry in Germany), narrows down the term automotive supplier:

“Suppliers to the automotive industry can be divided into two main groups. Automotive suppliers in the ‘narrow sense’ are those companies that supply automotive-specific parts and components directly to an OEM. Automotive suppliers in the 'broader sense' are companies that contribute non-automotive-specific services to the value chain. However, as a rule they are not considered to be part of the automotive industry, as otherwise a large number of companies - despite the very low proportion of value added - would fall into this category.”

Systematic overview of automotive suppliers(Source: Automobil Industrie) — Systematic overview of automotive suppliers
(Source: Automobil Industrie)

Explained: The supplier pyramid in the automotive industry (Tier 1, Tier 2, Tier 3)

Automotive suppliers can therefore be differentiated according to their value added stage. The supplier pyramid serves this purpose.

The supplier pyramid represents the hierarchical order of the suppliers of an OEM (Original Equipment Manufacturer) - right up to the end product, i.e. the vehicle. This car manufacturer is at the top of the pyramid. The supply chain ranging from parts suppliers to component, system and module suppliers through to original equipment manufacturers is represented in the pyramid.

A Tier 1 supplier supplies the OEM directly. They are followed by Tier 2 and Tier 3 suppliers in the supply chain. Suppliers at the bottom of the supplier hierarchy can also skip levels and supply the OEM — i.e. the manufacturer — directly, for example.

What products do the different suppliers produce? Example: The Audi A4

If you divide the car into the different vehicle areas, you can use an example - let's take the Audi A4 — to explain which parts and assemblies are manufactured by which suppliers. These parts and assemblies as well as the suppliers are only selected by way of example - of course there are many more in a vehicle.

1. Driver Assistance and Safety
Driver assistance and safety also include the areas of car IT and connectivity. So, it's about driver support, infotainment and operation, navigation systems and telematics, the networked vehicle (Car-2-X) or cloud computing. In addition to driver assistance systems, restraint systems and airbags, simulation and automated driving also play a role in the field of safety - even if the latter is not yet play integrated in the A4 selected in this example; but it will, when the model will be reissued next year.

The 2015 edition, for example, has a security system with a front camera supplied by Valeo. Various systems, such as lane change and lateral traffic assistants, require a radar that is produced by Bosch.

2. Interior
The curved front of Magna 's instrument panel is covered by a cord of integrated air vents that are interrupted only by the instruments. The component was made by Dr. Schneider. Lear is involved in the seat system; Schock Metall supplies roll-formed special profiles and guide systems for the storage and luggage compartment package, which is available as an option.

3. Car Body
The A4 has significantly slimmed down compared to its predecessor; also because the front strut domes are highly integrated cast aluminum parts. Magna supplies reinforcements and stamped parts. Structural parts are supplied by Gestamp. TRW (which has been part of ZF Friedrichshafen since May 2015) supplies caps and module clamps.

4. Undercarriage
The rear axle of the A4 comes from Gestamp, the wheel bearings are supplied by LuK.

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5. Infotainment and Electronics
A tablet is available for entertainment in the rear. A Tegra-40 processor from Nvidia drives the system. Kromberg & Schubert will supply the wiring system for the A4.

6. Powertrain
The transmission control comes from Continental. Again Hirschvogel Automotive produces wheel hubs and transmission shafts as well as rails and injector bodies for the diesel aggregates.

Important trends for automotive suppliers

Suppliers are increasingly focusing on the electrification of mobility, connectivity and autonomous driving. The large corporations succeed in doing this by separating entire business units that no longer fit into the portfolio in the long term and purchasing parts where gaps arise in future offerings.

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