Model to measure the degree of competitiveness for auto parts manufacturing companies

Abstract

The automotive industry has been at the forefront of the globalisation process as a result of increasing global design and manufacturing. This has imposed a heavy burden on local auto parts producers. To enable a better understanding of this problem, this paper proposes a model to measure the degree of competitiveness for auto parts manufacturing companies. The study starts by analysing the current competitive forces governing the relationship among automotive assemblers and their first-tier suppliers and proposes a model that establishes (a) a competitive standard and (b) a measure called the degree of competitiveness, to be used to evaluate how similar (or dissimilar) a given company is compared with the aforesaid standard. The proposed conceptual model was tested in real-life situations by applying it to three Brazilian auto parts manufacturers with well-known competitive positions. The model was able to reproduce the same competitive position as those perceived by the market. The model and findings cannot be generalised for other industrial segments without some review and adaptation of the competitive factors considered. If required, a different set of competitive factors could be selected while maintaining all other aspects of the model as proposed.