February 2008
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Engineering & Technology
The article writes car makers globally are seeking closer and less adversarial relationships with suppliers as they continue to outsource the production of components. The rapid growth of competition in the last quarter of the 20th century forced European and US car firms to seek out cost savings or perish. Both in-house component makers and outside suppliers have been affected profoundly, as the pursuit of cost savings has seen the transfer of in-house supply to an outsourced provider. This shift has enabled a greater exploitation of economies of scale in parts production, but has also produced a rationalising of vehicle makers' supply structure. Auto makers had come to the conclusion that more parts could be produced more economically by specialist suppliers than by in-house divisions.