January 13, 2021
The global auto parts OEM manufacturing industry is continually growing, and was set to reach $2 trillion in 2018. Because of this, there are countless options when it comes to getting your OEM auto parts manufactured.
But the process of selecting the right OEM manufacturer is more complicated than simply selecting one from a list. Follow this guide of questions to ensure that your parts are produced by the right manufacturer, so you can quickly and effectively get them to market.
When choosing domestic or overseas production, it's important to weigh the costs, speed, and quality of production of both:
By working directly with your manufacturer, you can save money by cutting out the middle man. You will also be intimately involved in the entire manufacturing process.
However, a broker may already have a working relationship with your manufacturer of choice. Therefore, they may also have more experience with the entire process, and can help with guidance along the way.
Just because a manufacturer makes products in your general industry doesn't mean that they can build your specific product.
For example, autos are complex and require a wide variety of products. You'll want to find an OEM auto parts manufacturer who specializes in the materials, products, emblems, badges, etc. that you need.
If you're building an engine, you need a manufacturer that specializes in metal production and fabrication. If you need trim work produced, then you need a manufacturer like Sanwa who specializes in small and detailed plastics pieces.
If you are a smaller company that is just starting out, you may want a manufacturer that is comfortable working with startups and taking on smaller-volume jobs. If your company is large and accustomed to producing high volumes of products, then you'll want a manufacturer that can handle a high demand.
We recommend not working with a company that refuses to sign an NDA or NNN. Intellectual property gets stolen and copied every day, so you'll want to make sure you protect your products with clear contracts that both parties agree to.
No matter which manufacturer you choose, it's recommended to obtain a patent in the country you intend to have your product produced in. This will help you protect your product technology.
If the manufacturer you choose does not handle the shipping of your product, then you'll need to make additional arrangements for delivery. Some manufacturers have partnerships with certain shippers (this could get you a discount) so it's good to ask.
Keep in mind that you will want to work with someone has knowledge of the international goods shipping process. There are tariffs and customs regulations that are important to know when it comes to planning and costs.
Many manufacturers have minimums, which are important to keep in mind when it comes to how much of your product you want to order. It is also standard for manufacturers to offer price breaks at certain volumes.
Ask the manufacturer what their policy is for providing a sample. Some manufacturers will have no problem negotiating a sample rate for you, and some automatically include it in the production quote. At Sanwa, our in-house tooling allows for quick samples and turnaround times, as well as the ability to scale production when a project has the green light.
Look for a manufacturer that can work within your time constraints. If needed, ask if they are willing to work with you on getting the product out in phases.
Don't forget to factor shipping time into your production timeline, too.
Also, ask your manufacturer about their record with meeting deadlines. Do they have a policy in place for if/when they do not meet the agreed upon production deadline?
Speaking of not meeting deadlines, ask your manufacturer how they handle delays. Obviously, no one wants to have a delay, but they do happen.
Ask about their policy, and make sure it is one you can live with. Keep in mind that you may be subject to a delay penalty if you tell your manufacturer that you cannot accept delivery on the agreed upon date.
You can likely expect a down payment for your order. It is normal for the manufacturer to ask for 50% of the cost up front, and the other 50% upon delivery and completion.
If a manufacturer demands 100% of the payment up front, be wary. This could be a sign of a not-reputable company.
When choosing the right OEM manufacturer, it's smart to start with listing your project requirements, time constraints, expectations, and budget. Once you know these, it's easier to start narrowing down the options.
You can also ask for manufacturers' referrals -- talking with their customers can help you determine if they're capable of producing your parts and meeting your expectations.
Overall, you'll want to find a manufacturer that you can develop a long-term working relationship with so that the entire process runs smoothly, now and in the future.
Speak with an OEM product expert today to learn more about how Sanwa can help you deliver world-class quality to your customers.