Whatever badge your car wears – be it a blue oval, a blue-and-white propellor or a couple of chevrons – have you ever wondered what the company behind that logo actually makes?
In short, and to make a sweeping generalisation, major car companies basically ‘make’ the painted metal body structure and the engine. That’s about it. All the rest is bought-in – purchased from the various so-called Tier One suppliers, some with household names like Bosch or Continental, others less-known, but still giant companies with names like Magna International, Denso or Valeo.
It’s not at all unusual for 70 per cent of the final cost (note cost, not price) of the vehicle to be spent on these bought-in parts – the remaining 30 per cent covering the bits made by the OEM (Original Equipment Manufacturer, in this case the car company) itself, and the cost of assembly, logistics etc. Behind these Tier Ones is a whole pyramid of Tier Twos, Tier Threes etc, a pyramid that has recently looked more like a rather wobbly tower-of-cards, as evidenced by the ‘chip’ shortage that Andrew English wrote about so eloquently in his piece about the chip crisis.
