← Business Models: Industry Specific (Industrials & Materials) (all topics)
Contract manufacturing - auto components (build-to-print)
What it is
Manufacturing to the customer's design and specification with no design IP of the supplier's own, often from a plant built beside the OEM assembly line to supply sequenced parts just in time
Body, seat and interior parts are bulky, so freight economics force proximity
Impact on industries
- Build-to-print earns a conversion margin only - the supplier owns no design, so there is nothing to defend when the OEM re-tenders
- A co-located plant is a dedicated asset with one customer, so plant closure or model discontinuation strands it entirely
- Physical proximity and sequenced supply create enormous practical switching costs, which is a different moat from design ownership
- Larger vehicles and EV battery enclosures raise content per vehicle, though OEM in-house pressing remains a standing insourcing alternative