1) Supplier Access Barriers

The pyramid-shaped supporting relationship between vehicle manufacturers and parts suppliers has formed a relatively fixed interdependence between complete vehicles and automotive parts companies, resulting in a strong cooperative relationship. Major vehicle manufacturers have strict certification requirements for parts suppliers, requiring them not only to possess leading technology, products, services, and stable production capacity in the industry but also to pass authoritative quality management system certifications recognized within the industry. Such certifications impose high requirements on the raw material supply management capabilities, product production processes, and product quality control of supporting manufacturers. Companies with weaker financial and technical strength face significant entry barriers, making it difficult for new entrants to replace existing suppliers.

2) Financial Barriers

The automotive parts industry is capital-intensive. On one hand, due to the high demands of vehicle manufacturers on the production scale, product quality and safety, and the timeliness and stability of supply from upstream parts suppliers, there is a significant capital requirement for parts suppliers in the processes of purchasing and constructing factories, acquiring production and testing equipment, and maintaining necessary inventory of raw materials and finished products. On the other hand, the high concentration of the global automotive industry often gives domestic and foreign vehicle manufacturers a certain negotiation advantage, resulting in relatively longer credit terms, which also places some pressure on the working capital of parts suppliers.

3) Technical Barriers

Automakers have high requirements for the technical content, reliability, and precision of parts, and they focus on assessing suppliers' technical strength, product quality, and manufacturing capabilities when selecting them. The automotive parts industry involves knowledge and technology in materials science, product design, mold design and development, product validation, process engineering, and product testing, and requires multiple interconnected stages to achieve the product manufacturing process. It necessitates the support of a professional technical talent team in design, processes, molds, and equipment to produce products that meet customer standards, thus creating a high technical barrier.