Martin's World

The big 3 are currently in a deep automotive crisis and their own liquidity is on the verge of zero.

This is a big problem, not only because of the dependency on external money funds to increase the ongoing business, but also because a possible loss of liquidity, only the idea distracts any customer.

First of all, by cutting of workforce, the big 3 are loosing most of their own vehicle customers, which consist to a large part of their own employees.

Further any other customer will think twice. Would you buy a car if you know that after purchase perhapse you wont have any warrany or spare parts for your vehicle left?

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Do you know what DZM, ACC or EDC means? What does the car maker say if they want to use a AHPS?

The secret is that many OEMs use different abbreviations and shortcuts do describe the components used in their cars.
Most time also within the component these shortcuts can be trademarked or are copy-protected.

The effect is that with increased amounth of components and different branded names for actually similar components at the vehicle maker, as well additional even the local company internal rules for used language standards increase and multiply the possible abbreviatens used siginificantly.

This sometimes it is getting very confusing when suppliers and OEMs talk about their used components.
And it is discussed in many different news-groups.
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Nowadays vehicles are composed of around 20 000 to 30 000 different parts , all of which even the largest manufacturers cannot produce by themselves. Therefore automakers are forced to outsource production or purchase already finished product parts from second and third level suppliers.

Also considering the individual complexity of the subparts it is a crucial thing to buy in the right parts without loosing the focus on other non competitive technologies but at the same time keep the fundamental differential criteria and intellectual property for the creation and design of unique, competitive and differencing car products.
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The automotive business is a very tough market. The market is fragmented and dominated by a relative small amount of huge global players.The entry barriers are huge due to economy of scale.

Last time I was wondering how much the profit margin would be for a single vehicle sales and I found some interesting numbers. Continue reading »

“Really? But what are the roles? Who are the players in the automotive electronics industry?“

One of my biggest doubts when I joined in this line of work was to understand the business relationships and term of the industry. Since my earlier career as software engineer in Austria did not allowed me to get involved too much into business, I had to figure out the way the industry plays the game and, by myself, learn the names and roles of the industry partners. Here, due to my experience, the focus will be put on the partners involved into the car development and the electronic component suppliers.

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“The auto industry is a huge contributor
to the well being of people and society,
with millions of people living from the
automobile.“　(OICA 2007)

While the vehicle manufacturing industry is an intervened network of mainly powerful worldwide players, there are many other related companies involved. It belongs to the top highest profit business units with a great economical power.
Concerning the OICA, the International Organization of Motor Vehicle Manufacturers, the auto industry’s turnover is approaching €2 trillion, (€ 2,000,000,000,000).
Comparing this turnover of GDP with other economies in the world, the automotive industry by itself would be able to compete with the economical power of countries like Italy, France or the UK.

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