Vendor development is very important. Both skill requirement and mindset of trust and long-term partnership become critical. The extreme fragmentation of the auto ancillary industry implies that few players have capacities to match world standards. Besides, OEM manufacturers prefer to spread orders for the same component across several producers. Since components can be vehicle-specific, it means extra investments in plant and machinery which can strain the resources of the manufacturer.
Fragmentation is a problem.
I don't think so. Strategic cooperation between component makers across the world may be the answer. By and large Indian auto component units are perceived internationally as below par in terms of technology and quality. The rejection rate is believed to be 2,900 per million as against the international norm of 240 ppm. The feeling is.