Auto Parts Manufacturing – Analysis 1

Ontario is crowd sourcing thoughts and ideas in order to develop modern, outcome-focused, evidence based regulation. https://www.ontario.ca/page/red-tape-challenge

I decided to tackle one of the six categories identified – Automotive Parts Manufacturing. Here are my thoughts written down. I would love some feedback, please leave me some comments.

Red tape Challenge:

  • Goal: Modern, outcome-focused and evidence based regulation
  • Question: How can we improve regulations to better support business?
  • Why: Reduce burden to busines while protecting customers, workers and the environment. This helps create jobs and grow the economy.

Where to start?
I decided to start from the Macroview(MAC) then  to the Microview(MIC)


MacroView
(1)Identify top 10 companies that manufacture auto parts for the world.
Focus on their main manufacturing base country
(2)List products manufactured, list the markets where their products are sold
(3)What are the upstream factors in automotive manufacturing that have a
significant impact to employment?
(4)How does an improvement in regulation help create jobs, grow the economy while
reducing burden to business, protecting customers, workers and the environment?

(5)Determine which policies at Federal/Local levels that meet the following goals:
(a)Reduce Burden on Business
(b)Protect Customers
(c)Protect Workers
(d)Protect the Environment
(e)Promotes job growth which inherently grows the economy

(6)Who needs automotive parts?
(7)Why don’t Automotive manufacturers produce their own parts?
(8)Why do Automotive manufacturers setup in emerging markets?
(9)Why has the automotive industry remained regionalized?
(10)Why have Auto Supplier contributions increased from 56% to 82%
(11)For automakers to produce more cars, what are the downstream impacts to industry,
jobs, economy?


MicroView

(1)For each country identified as a top parts producer, look to upstream manufacturing and regulation.
(2)Correlate regulations – major auto parts manufacturing countries vs Canadian regulations
(3)What should the Canadian government focus on in order to boost Auto Parts Manufacturing?
(4)What are the top 3 regulation changes upstream that would have the largest impact
downstream to Canadian Auto Parts Manufacturers?


Top 10 companies in the world that manufacture auto parts:

Source:https://www.autonews.com/assets/PDF/CA89220617.PDF

Robert Bosch GmbH – Stuttgart, Germany
Gasoline systems, diesel systems, chasis system controls, electrical drives,
starter motors & generators, car multimedia, electronics, steering systems, battery
technology, exhaust gas turbochargers and treatment systems
36.787B
North American Percentage – 17
Europe Percentage – 52
Asia Percentage – 27
Rest of the world – 4
Top 3 locations
Germany – 112300 employees
India – 26000 employees
North America – 24750 employees

Denso Corp, Kariya, Japan
Thermal, Powertrain control, electronics & electrical systems,small motors, telecommunications
34.200B
North American Percentage – 16
Europe Percentage – 11
Asia Percentage – 71
Rest of the world – 2
Japan – 132276 employees
North America – 17000 employees

Continental AG, Hanover, Germany
Electronic & Foundation brakes, stability management systems, tires,chasis systems, safety system electronics, telematics, powertrain electronics,interior modules, instrumentation, technical elastomers
32.8B
North American Percentage – 21
Europe Percentage – 50
Asia Percentage – 25
Rest of the world – 4
Germany – ? employees
Argentina – ? employees
Costa Rica – ? employees
North America – 1600 employees

Magna International, Aurora, Ontario
Bodies, chasis, interiors, exteriors, seating, powertrain, electronics,mirrors, closures & roof systems & modules
North American Percentage – 53
Europe Percentage – 40
Asia Percentage – 0
Rest of the world – 7
Canada, Mexico, USA – 65000 employees
Europe – 55000 employees
Brazil, Argentina – 3500 employees
Asia – 17700 employees

Aisin Seiki Co, Kariya, Japan
Body, brakes & chasis systems, electronics, drivetrain & engine components
30.08B
North American Percentage – 14
Europe Percentage – 10
Asia Percentage – 76
Rest of the world – 0
Japan – 78000 employees
North America – 8000 employees

Johnson Controls, Milwaukee, USA
Seating, overhead systems, door & instrument panels, center & overhead consoles & interior electronics, lead acid & hybrid vehicle batteries
22.515B
North American Percentage – 41
Europe Percentage – 47
Asia Percentage – 12
Rest of the world – 0

Faurecia, Nanterre, France
Seating, emissions control technologies, interior systems, exteriors
22.500B
North American Percentage – 27
Europe Percentage – 56
Asia Percentage – 10
Rest of the world – 7

Hyundai Mobis, Gangnam-Gu Seoul, Korea
Chasis, cockpit & front-end modules, ABS, ESC, MDPS, airbags, LED lamps, ASV parts, sensors, electronic control systems, hybrid car powertrains, parts & power control units
21.351B
North American Percentage – 22
Europe Percentage – 11
Asia Percentage – 67
Rest of the world – 0

ZF Friedrichshafen AG, Friedrichshafen, Germany
Transmissions, chasis components & systems, steering systems, clutches dampers
18.614B
North American Percentage – 19
Europe Percentage – 58
Asia Percentage – 18
Rest of the world – 5

Yazaki Corp, Susono City, Japan
Wiring harnesses, connectors, junction boxes, power distribution boxes,instrumentation, high voltage systems
15.801B
North American Percentage – 22
No other information available


(3)What are the upstream factors in automotive manufacturing that have a
significant impact to employment? Consider top 10 companies for auto parts manufacturing and their country of operation: Germany, Japan, Canada,USA, France, Korea.

Verdict:

  • Mean score out of 7. Lower scores are better. Default rank is 10 if no rank or greater than 10.
  • USA Mean Score: (3+6+2+3+1+10+5 / 7) = 4.29
  • Japan Mean Score:(2+10+3+10+10+10+2)/7=6.71
  • Germany Mean Score:(10+10+1+10+10+10+1)/7=7.43
  • Canada Mean Score:(3+4+10+7+10+10+10)/7= 7.71
  • Korea Mean Score:(4+10+10+10+10+10+10)/7=9.14
  • France  Mean Score:(10+10+10+10+10+10+10)/7=10
  • Canada ranks 3 in Aluminum and 4 Fossil Fuel.
  • Canada ranks 17th in global Steel production
  • Canada ranks 7th in the IT sustainable index (Software)
  • Canada does not rank top 10 globally in either Rubber, Plastics, Glass production

What’s I find interesting – 3 of the top 10 companies who manufacture Auto Parts are based in Germany however Germany ranks 3rd in the overall mean score for materials required to produce Auto Parts.

Despite having a clear advantage in raw materials for Auto Parts, the USA has 1 company that ranks top 10, tied with Canada.

Japan is number 2 on the Mean score and has 3 companies in the top 10 for Auto Parts manufacturing.

I can theorize that although raw materials are an important aspect to bolster successful top 10 Auto Manufacturing businesses, other factors are involved. France and Korea are good models to study as they are not in the top 10 for any raw material production however have the #7 and #8 Auto Manufacturing companies in the world.

I will focus on France and Korea in order to determine the top 3 factors that allow for a top 10 showing in world Auto Parts Manufacturing.

More to come in blog #2

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