Automotive

Operation profile

The global automotive industry is dominated by world-scale manufacturers, such as Toyota, General Motors, Ford, Chrysler, Honda, Nissan, Volkswagen, and others. These manufacturers outsource much of their parts production to larger "Tier 1" suppliers, who, in turn, often subcontract production to smaller "Tier 2/3" manufacturers. Parts manufacturers may supply both Original Equipment Manufacturers (OEMs) and the replacement parts market.

Most "Tier 2/3" suppliers manufacture a specialty or some combination of metal components, plastic components, and electronic components. The representative operation modeled is a "Tier 2/3" supplier of manufactured auto parts assemblies. As detailed in the following table, this operation is characterized by:

  • Moderate facility and equipment requirements
  • A balanced workforce of skilled and unskilled workers
  • Moderate energy requirements
  • Relatively high costs for materials, reflecting the significant use of components and sub-assemblies.

The business is assumed to operate as a stand-alone profit center.
 

Summary of operating parameters

Industry: Automotive

Operation: Auto parts manufacturing

Facilities requirements
   Owned industrial site - acres (24,281 m2)
6
   Size of factory - ft2 (9,290 m2)
100,000

Other initial investment requirements
   Machinery and equipment - US $'000
$13,000
   Office equipment - US $'000
$500
   R&D equipment - US $'000
$75
   Inventory - US $'000
$2,500
   Equity financing - % of project costs
50%

Workforce
   Management
4
   Sales and administration
15
   Production/non-dedicated product development
      - Professional, technical
27
      - Operators
35
      - Unskilled laborers
14
   Other
5
 
Total employees
100

Energy requirements
   Electricity: monthly consumption demand - kWh
352,500
   Gas: monthly consumption - CCF (37,663 m3)
13,295

Other annual operating characteristics
   Sales at full production - US $'000
$43,000
   Materials and other direct costs - % of sales
54%
   Other operating costs - % of sales
5%
   Investment in tax-eligible R&D - % of sales
2.3%

International results

International results are illustrated in the following chart. These results reflect the combined impact of 26 location-sensitive cost components applied to the modeled operation. Detailed results for these countries, by individual cost component, are available as a separate table.

City results

The following table profiles results for selected cities, by country, from among the 111 cities featured in this report. Results for all other cities included in the study can be found in the Results lookup section of this website.

Results for selected cities
Industry: Automotive
Operation: Auto parts
North America – selected cluster cities
Country and CityIndex & Rank1
CABarrie, ON91.35
 Montreal, QC91.711
 Toronto, ON91.913
MXMexico City, DF88.42
 Monterrey, NL87.01
USCharleston, WV96.549
 Detroit, MI98.586
 Jackson, MS96.345
 Lexington, KY95.943
 Montgomery, AL95.433
 Nashville, TN95.841
 Saginaw, MI97.569
 Shreveport, LA95.232
 Spartanburg, SC96.855
 Youngstown, OH96.447
1  Rank among 111 featured cities.
 
 
 
International locations – all cities
Country and CityIndex & Rank1
AUAdelaide93.625
 Brisbane94.930
 Melbourne93.523
 Sydney94.027
FRMarseille94.228
 Paris94.329
GEBerlin95.534
 Frankfurt95.737
ITMilan93.524
 Rome94.026
JPOsaka95.838
 Tokyo96.854
NLAmsterdam92.421
 Rotterdam92.419
UKLondon95.231
 Manchester91.79
1  Rank among 111 featured cities.

 
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