Automotive Supplier Development

Sustainable Automotive Supplier Development

The automotive industry is an industry of strategic importance to numerous countries, with many developing and emerging country players competing for growth markets and the generation of new business and employment opportunities. Hit by various crises and being increasingly subject to policy discussions on issues such as climate change, energy use, passenger safety and mobility, enterprises in the sector, industry support institutions and policy-makers alike are continuously challenged to revise and adapt their approaches to maintain competitiveness and to sustain their growth path.

Vehicle manufacturers tend to pass augmenting market pressures on to their suppliers in terms of price and quality and the number of parts, components and (integrated) systems that are outsourced by vehicle manufacturers is increasing continuously. Automotive component manufacturers thus have to comply with a continuously increasing demand for high quality, reliability and innovation. As there is also a trend towards error-free delivery at all times, the challenge is not only to reach the demanded targets, but to achieve them in the shortest time possible and to maintain such performance over the long term. Advanced supply chain requirements relating to cleaner production, energy efficiency, traceability, and occupational health and safety are also making inroads into OEM-Tier-1-lower-tier relationships and are likely to become more pronounced in the future.

In order to respond to these dynamics, developing countries and emerging markets are coming up with different approaches to move the automotive industry towards a sustainable business model:

  • through the provision of incentive and support schemes to upgrade and strengthen component suppliers,
  • the development of appropriate public policy and technology frameworks, and/or
  • the creation of relevant alliances and partnerships (e.g. public-private partnerships, private-private partnerships, social dialogue).

Through the Sustainable Automotive Supplier Development Programme and related technical assistance, UNIDO strives to support client countries in the pursuit of these aspirations through the provision of an integrated and comprehensive service portfolio.


Due to its long-standing involvement in the automotive industry through technical assistance projects as well as research initiatives and global forum events, UNIDO has developed an in-depth understanding of the sector and established a relevant network of technical experts and collaborating institutions. On this basis, UNIDO can directly assist developing countries and economies in transition, particularly by advising policy makers on how to develop and implement support schemes for the industry and to promote green industry development.

The current UNIDO technical assistance portfolio includes the following services:

  • Developing automotive supplier networks and clusters
  • Strengthening the interface between business, academia and industry support institutions
  • Benchmarking suppliers against the performance of national and/or international control groups
  • Training on productivity, quality enhancement and lean manufacturing techniques
  • Productivity and quality upgrading of Tier-1 and lower tier automotive component suppliers (at shop floor and management levels)
  • Training in resource efficiency and cleaner production techniques
  • Facilitating supply chain linkages and supporting OEM supplier development iniatives

Towards the Future

To enhance the provision of technical cooperation services, to keep up with the constant evolution of the automotive industry and the requirements along global supply chains, and to explore new areas of support, UNIDO organized a Technical Consultation with external experts on 12-14 October 2011 to review its ongoing, past and future automotive industry-related activities, to undertake a gap analysis and to chart the way forward for a more comprehensive and at the same time strategic approach to supporting the automotive industry in its client countries. A UNIDO Strategy Paper on Technical Assistance for the Automotive Industry will be prepared during the second half of 2012.