The automotive industry is a complex ecosystem where a big firm – the ones all we know and which advertisements and TV spots are published everyday – is surrounded by a whole system of small and medium enterprises (SMEs) which feed and help the main firm.

Originally, the car builders made all the single parts which are needed on a car: from the engine up to the small screws required at the doors.
With the increase of the car industry and the car demand, that kind of system was not efficient anymore. Car builders decided to outsource some parts of their business and became car assemblers.
With this new model, they design every part on a car but they do not produce them anymore.

Promoting the small industries
The rising demand of cars has developed a secondary industry which is very specialized and produce, on high levels of efficiency, unique parts of cars.
“Some workshops have only one or two types of machines, like jig boring machines and produce the same component over and over.”

Parts like headrests, windows glasses, wheels or many other parts, are produced in different factories than where the car is assembled. This kind of structure promotes the creation of small business which can receive the design of a component, produce it and finally, send it back to the corporate factory. Many families live thanks to this production system.

Crisis for all
When the automotive industry suffers a crisis, not only the main brand is affected by the reduction of the sales: the whole ring of partner enterprises is affected by the reduction of the demand. As not many cars are sold, not many cars are produced. That is translated on a reduction of the components needed by a car factory, affecting the production of the small partner business.

The car industry is like a big family where the decisions of the parents – the big firms – affect directly to the way of living of the kids – the small factories -.