With developing infrastructure in the developing countries and more people joining the middle class automotive industry is one of the industries that are expanding very rapidly making it a good opportunity for investment. Automotive supplier can be defined as the companies that manufacture goods to be used in the manufacture of automobile parts or used as the automobile parts such that these goods are supplied directly or indirectly to the Automobile Manufacturers.
Automotive suppliers can be categorized into the automotive suppliers in the narrow sense who produce goods that are automotive specific parts and components and supply them directly to original Equipment Manufacturers (OEM) and the automotive suppliers in the broader sense who supply non automotive specific parts. An automotive part manufacturer can do well in most countries in the world especially the developing world considering the factors mentioned above, but still you have to fight competition and rising prices of raw materials since sometimes you have to lower the prices of your parts to keep them in a good position of getting market. Automotive parts manufacturers deal with a variety of parts that they manufacture such as engine parts, breaking parts, spark ignition and parts and body and chassis here!
This kind of investment if not well monitored it can cause great losses the same as the great profits it would bring if well monitored and therefore you should first find your area of interest based on your knowledge and capabilities and also the capital required for the investment to avoid starting an automotive part manufacturers company just to collapse in a matter of time. Of course it is not possible to supply the whole transport industry hence you must choose an area that you will supply and more importantly the parts you will supply to that segment. Always seek more about this investment before deciding to major in them and analyze them carefully.
In every business opportunity there are challenges and automotive parts manufacturing is not an exception and so these companies must be innovative or rather creative to face these challenges and standout as winners. The starting capital required to purchase land, buildings, capital goods, and raw materials is very high, and if you have doubtful financial background it makes it very hard for the banks to finance your investment, and this is the major reason why developing countries scare their citizens from this kind of investment. In developing countries we have very poor infrastructure services especially in rural areas which are limiting the great use of automobiles and this in response limits the expansion of automotive parts manufacturing.
This sector is facing another great challenge of fighting counterfeit and assure their clients that their goods are of good standards and this is one of the major reasons why most people value imported automotive parts than the ones manufactured locally. Sometimes profits are lost in the process of lowering prices of your automotive parts in an attempt to cope with the strong competition and get a good market.