The automotive components sector accounts for a significant share of the total production capacity in the global manufacturing industry. The global automotive components industry is a highly diversified sector that involves engine and auto component manufacturers, including aftermarket parts manufacturers, dealers, suppliers, and retailers. The production of automotive components is gradually moving toward Asian countries, such as India and China, due to the higher market potential and the low-cost of manufacturing. Additionally, the growing importance of electronics and functional integration of green components and sustainable products is expected to drive the growth of this sector.
[spacer height=”20px”]Although the industry is expected to showcase promising growth, several factors may hamper the growth of the automotive components space. These factors include:
- Increased competition: Despite the longer-term slowdown projected for mature markets, competition is growing increasingly intense, with more OEMs and many more automotive components being offered than ever before.
- Globalization and consolidation of platforms: Leading automotive components manufacturers are rethinking their platform strategies in response to the pressures generated by intensifying competition, new global consumers, and state regulators.
As a result of these factors, leading automotive components manufacturers have started leveraging the use of competitor analysis studies. Competitor analysis studies help companies identify and profile competitors while evaluating their core strategies to determine the strengths and weaknesses of the services rendered. These studies also assist companies in gaining a deeper understanding of the list of services, marketing objectives, profitability, and the growth potential within the automotive components sector.
The Business Challenge
- The client: A leading automotive components manufacturer
- Area of engagement: Competitor analysis
The client, a leading manufacturer of the automotive components with business operations spread across the globe, wanted to gain an in-depth understanding of the competitors, their services, and efficiently analyze their current and future market share within the industry space. The client also wanted to carry out a robust SWOT analysis to identify the possible opportunities and threats in the industry space. Moreover, with the help competitor analysis, they wanted to analyze the competitors’ market share, their current and past strategies, and the extent of services provided to their customers.
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The competitor analysis experts at Infiniti carried out extensive interviews and discussions with prominent stakeholders in the automotive components industry to assess the strengths and weaknesses of the competitors. The experts also gathered information from a wide array of secondary sources such as company presentations, paid industry databases, and industry forums.
The Solution Benefit and the Business Impact
With the help of this competitor analysis engagement, the client was able to increase their focus on assessing the competitors and understanding the five forces model in terms of the threat of potential entrants, the initiation of new services, buyers, suppliers, and the organization’s strengths and weaknesses. The competitor analysis experts also offered the client a robust go-to-market strategy, which helped them gain relevant insights into the customer base, their preferences to meet changing demands, and achieve organizational growth.
To increase sales, it is predicted that the automotive industry will have to execute new strategies in its manufacturing process, as well as the contribution it is trying to make to a country’s economy. Additionally, it is expected that the automotive industry will start manufacturing products that fulfill the customers’ needs for safety and comfort and specialize in niche components that are demanded by different segments. Furthermore, it is stated that components that provide the maximum comfort and sustainability are more likely to have a more significant margin of sales and profits compared to standardized parts.
A must-read case study for strategy specialists and decision makers looking to develop an understanding of the automotive components industry.