The U.S. dollar's depreciation is reshaping the global automotive supply chain, with significant implications for American automakers and their suppliers. According to a report by the Financial Times, U.S. auto parts suppliers are losing ground globally due to the sharp decline in the value of the dollar and the weakening position of their largest customer—U.S. automakers.
SupplierBusiness.com recently updated its rankings, revealing that Delphi and Visteon, once leading global suppliers, have slipped from first and third to second and fourth place, respectively, when measured against the current exchange rate. Originally subsidiaries of General Motors and Ford, these companies now face stiff competition from international players.
Robert Bosch, a German privately-owned company, has emerged as the world’s largest automotive parts supplier, driven not only by the strengthening euro but also by strong European demand for diesel engines, where Bosch holds a dominant position. In 2023, based on the average euro-to-dollar exchange rate, Bosch generated $26.2 billion in auto parts sales, just slightly behind Delphi’s $27.3 billion. However, analysts predict that Bosch will overtake Delphi this year, as Delphi plans to cut nearly 10% of its sales, while Bosch anticipates continued growth.
Denso, Japan’s top auto parts supplier, ranks third globally, benefiting from the strong performance of Japanese automakers in the U.S. market. These manufacturers have expanded aggressively, often favoring domestic components, which also helps Denso maintain its competitive edge. Even foreign automakers, despite localizing their supply chains, tend to prefer locally produced parts, giving an advantage to regional suppliers like Denso.
Edmund Chew of SupplierBusiness.com notes that the weaker U.S. dollar is a key driver of these shifts. However, the changes also highlight the struggles of Delphi and Visteon, which remain closely tied to their parent companies, General Motors and Ford. Visteon, in particular, has faced severe challenges, especially in managing pension and healthcare costs. The company recently received a financial bailout from Ford and was downgraded to junk status by Moody’s.
While Delphi has made efforts to diversify its client base beyond General Motors, 61% of its revenue still comes from the automaker. This dependency underscores the ongoing challenges for U.S. suppliers in breaking free from the shadow of their traditional parent companies. As global markets evolve and currency fluctuations continue, the landscape for automotive suppliers is becoming more complex and competitive than ever before.
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