Modules and Systems Outsourcing is Key Strategic Issue for Vehicle Manufacturers and Teir-one Suppliers
Manufacturers See Long-Term Potential in Outsourcing Sub-Assemblies and Integrated Systems and Suppliers See Growth Opportunity, According to New Global Study
1 December 2004
STAMFORD, UK, and DETROIT, USA (December 1, 2004) --- As the automotive industry’s approach to the use of modules and systems matures, it becomes clear that collaboration between vehicle manufacturers and suppliers is a critical success factor for an effective modules or systems outsourcing operation. This was among the findings of the newly released Modules & Systems study, published by AutoBusiness, a UK-based business research company focused on automotive supply base issues, and sponsored by Capgemini, one of the world’s foremost providers of consulting, technology and outsourcing services.
The global report examines the development of trends in the modules and systems business, outlines the range of strategies that are being adopted, and evaluates the most likely scenarios to impact the overall industry in the next four years. The study offers an in-depth look at the increasingly important strategic role modules and systems outsourcing plays for both manufacturers and tier-one suppliers. The study includes profiles of modules and systems sourcing by 10 manufacturers: BMW, DaimlerChrysler, Fiat, Ford, General Motors, Honda, PSA Peugeot-Citroën, Renault-Nissan, Toyota and Volkswagen. Also included is a review of modules and systems use by sector – powertrain, chassis, exterior, interior, and safety, comfort and convenience – as well as 43 supplier profiles, from Aisin Seiki to ZF Friedrichshafen.
“The report aims to map out these developments so that supplier and purchasing executives can compare and contrast strategies,” says Edmund Chew, Managing Director, AutoBusiness.
The study found that the major car makers appear committed to a long-term reduction in the level of in-house value added. But the growth of systems and, in particular, modules has not been as fast as expected in some areas, and suppliers have sometimes found it difficult to earn money on the larger, more complex developments and assemblies they have undertaken.
“As OEMs continue the trend to source from supplier companies more content of a vehicle, the need for collaboration, improved processes and integrated systems becomes more and more vital. There are various approaches to a successful systems or modules strategy. A supplier must understand these approaches in order to continue gaining profitable business. In addition, the OEM and its supplier partners must be aligned on these approaches in order to jointly be successful,” says Herb Schul, Vice President, Global Supplier Leader, Global Automotive Sector, Capgemini.
The study found that suppliers have adopted a range of modules and systems strategies. For example, ArvinMeritor and Faurecia have concentrated on modules, while Bosch and Valeo have focused on systems development. And ZF is primarily interested in systems and modules for medium-volume models, where it has a large in-house content.
About AutoBusiness
AutoBusiness is a business research company focused on automotive supply base issues. We aim to provide accurate and timely information about emerging trends in the sector. Our clients include all the major automotive manufacturers and over 250 of the world’s leading suppliers. We are pleased to be partners to some of the leading financial and business service providers to the sector.
About Capgemini
Capgemini, one of the world’s foremost providers of Consulting, Technology and Outsourcing services, has a unique way of working with its clients, which it calls the Collaborative Business Experience. Through commitment to mutual success and the achievement of tangible value, the company helps businesses implement growth strategies, leverage technology, and thrive through the power of collaboration. Capgemini employs approximately 60,000 people worldwide and reported 2003 global revenues of 5.7 billion euros. More information about individual service lines, offices and research is available at www.capgemini.com.
About Capgemini’s Global Automotive Practice
Capgemini’s automotive practice serves 14 of the world’s 15 largest vehicle manufacturers and 10 of the12 largest automotive suppliers. Our automotive sector generates value for companies through automotive-specific service offerings and global delivery capabilities. Capgemini’s Collaborative Business Experience makes automotive companies stronger by combining what they do best with what we do best to improve performance.
For more information, please contact:
Sarah Mackenzie
AutoBusiness
+44 1780 481712
sarah.mackenzie@autobusiness.co.uk
Priscilla Donegan
Capgemini
+1 248 544 7680
priscilla.donegan@capgemini.com
