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Global Automotive Component Outsourcing Market to Reach $1.09 Trillion by 2017, According to New Report by Global Industry Analysts, Inc.

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Global Automotive Component Outsourcing Market to Reach $1.09 Trillion by 2017, According to New Report by Global Industry Analysts, Inc.

GIA announces the release of a comprehensive global report on automotive component outsourcing market. Although the prolonged severity of the economic slowdown and depressed automotive industry have elicited decline in revenue for automotive component outsourcing in the recent years, the market nevertheless is expected to recover poise in the short to medium term period to reach $1.09 trillion by 2017. Growth in the market will be especially driven by increase in automobile production as a result of post recession resurgence in consumer demand for new cars and scheduled development and roll out of new feature-rich vehicle models. Robust growth prospects in Asia-pacific also augur well for the market.

San Jose, CA (Vocus/PRWEB) April 11, 2011

The automobile industry has been one of the worst hit industries by the recession, as the demand for cars witnessed hurting declines, exacerbating the already existing woes of excess production capacities. With vehicle sales nose-diving resulting in plant shutdowns, shockwaves that ripped through the automobile industry was faithfully transmitted to the automotive component outsourcing market. The trickle down impact of the depressing business climate in the automotive industry on the global Automotive Component Outsourcing market is reflected in notable declines in growth rates in recent years. Factors that have brought down the automotive industry, such as restricted access to credit, rising levels of unemployment, decline in purchasing power, reduction in household wealth, falling consumer confidence, and postponement of new car purchases, among others have also played instrumental roles in dragging down growth in the automotive component outsourcing market of the auto industry.

Unlike periods of economic boom where the cost of vertical integration is lesser than the “transaction” costs associated with outsourcing, periods of downturn create demand volatility and inability to reduced fixed costs under a vertical integration. This is because such a structure embodies higher asset intensity, and therefore higher fixed costs, and lesser flexibility to change production levels and product mix and technologies in line demand swings. Despite the fact that outsourcing represents a best business strategy during a downturn where operational/business flexibility becomes crucial to survival, the component outsourcing market weakened during the recession weighed down heavily by the crushing effect of reduced automotive production. The value and volume of outsourced auto components decreased steeper than total vehicle sales as consumers also migrated from high-content SUVs and trucks to lower content passenger cars. Smaller, cheaper, economy cars have fewer parts/components than their high-end counterparts. Elimination of value added features to produce low-cost vehicles have therefore impacted business opportunities for component outsourcing. Independent suppliers witnessed significant reduction in orders for components from OEM automakers during the recession period.

However, with recession having played out its part in full proportions and the automotive industry emerging from the previous lows, the worst is now over for automotive component outsourcing market, and a rebound is seen as inevitable over the next few years. With vehicle production staging a comeback, thanks to increasing consumer demand for new cars as a result of resurgence in growth fundamentals such as recovery in GDP growth, improvements in employment rates, incomes levels and discretionary incomes, and rise in consumer confidence, the demand for automotive components in the for integration into new vehicles will be on the rise over the next few years, thereby creating the need for outsourcing component manufacturing.

As stated by the new market research report on Automotive Component Outsourcing, Asia-Pacific remains the most prominent regional market for automotive component outsourcing, with revenues from the region waxing at a CAGR of about 12% over the analysis period. Growth in the Asia-Pacific market is especially driven by the robust automotive production scenario in the region, thanks to growing demand for new cars in emerging countries such as China and India.

Major players in the marketplace include ArvinMeritor, Inc., Amtek Group, AGC Flat Glass, Benteler International AG, Autoliv Inc., Bharat Forge Limited, BorgWarner Inc., BorgWarner Turbo Systems GmbH, Continental AG, Cummins Inc., Delphi Automotive LLP, Denso Corporation, Faurecia, Honeywell Turbo Technologies, Johnson Controls, Inc., KIRCHHOFF Automotive GmbH, Lear Corporation, Magna International Inc., Michelin Group, Rane Group, Robert Bosch GmbH, Shriram Pistons, Sundaram Fasteners Limited, Takata Holdings Inc., Tenneco Inc., ThyssenKrupp Steel Europe AG, TRW Automotive, Visteon Corporation, Valeo Group, and ZF Friedrichshafen AG among others.

The research report titled “Automotive Component Outsourcing: A Global Strategic Business Report” announced by Global Industry Analysts, Inc., provides a comprehensive review of market trends, issues, drivers, company profiles, and key strategic industry activities. Market estimates and projections are presented for all major geographic markets including Japan, Europe, Asia-Pacific (China, India, & Rest of Asia-Pacific), and Rest of World.

For more details about this comprehensive research report, please visit – http://www.strategyr.com/Automotive_Component_Outsourcing_Market_Report.asp

About Global Industry Analysts, Inc.

Global Industry Analysts, Inc., (GIA) is a reputed publisher of off-the-shelf market research. Founded in 1987, the company is globally recognized as one of the world's largest market research publishers. The company employs over 800 people worldwide and publishes more than 1200 full-scale research reports each year. Additionally, the company also offers thousands of smaller research products including company reports, market trend reports, and industry reports encompassing all major industries worldwide.

Global Industry Analysts, Inc.

Telephone: 408-528-9966

Fax: 408-528-9977

E-mail: press(at)StrategyR(dot)com

Web Site: http://www.StrategyR.com/

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For the original version on PRWeb visit: http://www.prweb.com/releases/prwebautomotive_component/manufacture_outsourcing/prweb8285953.htm

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