Off-shore sourcing poses a double threat to U.S. suppliers of original equipment and aftermarket components for domestically produced automobiles. U.S. suppliers will lose not only the sale of the components going into the new vehicle, but are quite likely to lose the aftermarket for these parts as well. Today, foreign-built components represent less than ten percent of the cost to build an average American car. By the early 1990's, the U.S. vehicle makers are predicting that the off-shore components will represent roughly 30 percent of that cost.
This paper reports the results of exercising a computer model of the U.S. aftermarket to analyze the predicted impact of this off-shore sourcing on the original equipment suppliers' aftermarket business.