What is the difference between automotive tier1 and tier2?
3 Answers
Here are the specific differences between automotive tier1 and tier2: 1. Definition: Tier1 refers to first-tier suppliers who sign supply contracts directly with OEMs. Tier2 refers to second-tier suppliers who sign contracts with first-tier suppliers. 2. Supply method: The components supplied by first-tier suppliers are not necessarily entirely manufactured in their own production lines. For example, the LCD screens for instrument clusters are often purchased externally, with the LCD screen suppliers being second-tier suppliers. In general component manufacturing, first-tier suppliers may also acquire required parts and services through purchasing or outsourcing.
As a technical professional with years of experience in the automotive industry, I often observe a clear distinction between Tier 1 and Tier 2 suppliers: Tier 1 suppliers work directly with automakers, delivering complete systems such as brake assemblies or electronic control units. These high-value, highly integrated components are typically managed by major corporations like Bosch or Continental, which are deeply involved in design and testing throughout the process. Tier 2 suppliers, on the other hand, supply materials or sub-components to Tier 1 suppliers, such as chips or plastic parts. While these components indirectly affect vehicle quality, Tier 2 suppliers rarely interact directly with automakers and face fiercer competition. They can reduce costs but are often vulnerable to supply chain disruptions. Digging deeper, Tier 1 suppliers hold greater authority and assume higher risks in projects, while Tier 2 suppliers focus more on foundational manufacturing. The recent chip shortage has exposed the fragility of Tier 2 suppliers, causing delays in vehicle production.
As a seasoned car enthusiast who has driven various models, I've come to find the distinction between Tier 1 and Tier 2 suppliers quite fascinating: It's like playing with building blocks. Tier 1 suppliers provide entire modules like engines or navigation systems that go directly into vehicles, while Tier 2 supplies smaller components such as screws and batteries that must first go to Tier 1 before reaching cars. The key difference lies in their roles - Tier 1 plays more core functions with higher costs but offers customization and innovation (like smart driving modules), whereas Tier 2 focuses on foundational, mass-produced parts with thinner margins where even material changes can affect final performance. This structure makes automotive design-to-production more efficient, yet also prone to issues in minor links - like when my friend's EV charging malfunction was traced back to a loose terminal from a Tier 2 supplier.
