The automotive industry has always presented a lot of challenges for those of us who manufacture the springs for them. The main issue stems from the tight restriction, safety/quality guidelines, and general business demands that are intrinsically linked to the industry. Despite all these hurdles, though, the success of the automotive industry is tied very closely to spring makers and other parts manufacturers, and vice versa.
Many spring manufacturers, over the years, have relied very heavily on the automotive industry. In the past, this wasn’t much of a problem, and many companies made a lot of profit going that route… right up until the recession hit everyone hard. Suddenly the biggest car manufacturers were cutting back on their production, which left many of their suppliers suddenly without an outlet for their products.
Working with the Automotive Industry
Even now, as things start to look up in the industry, it can be very difficult to work in automotive circles because the margins are extremely tight. There is simply no room for error. Any springs made for a new vehicle must meet some exacting specifications, and any mix-ups can turn the prospective profits into nothing. On top of that, rising material costs have cut those margins even further, making it very hard to sustain a business by relying solely on a single market segment.
The Key is Diversification
The lesson from this is that the best way to succeed as a spring manufacturer is through diversification. While there may have been a time when the automotive industry could support multiple spring makers, that simply isn’t the case anymore. That doesn’t mean there isn’t a market at all for automotive springs. It simply means that one must have a good cash flow through other markets to ensure that success isn’t dependent completely on a single buyer.
Diversification can take many forms. We work with a wide range of industries and provide springs for industrial equipment, locomotive engines, playground equipment, and much more. Even within the automotive market, there is room for diversification, and we deal with aftermarket parts, military vehicles, and race cars.
Balancing Supply and Demand
Balancing the supply and demand for springs in the automotive industry has always been a challenge, and will likely continue to be so. The manufacturers have gone through hard times, significantly limiting the demand, which meant there was no need for the supply. But as customers start to come back, car manufacturers will once again start looking for the most affordable alternatives for parts supplies.
As the demand increases, it will be important to remember the lessons learned over the past few years, and while it might seem like a lucrative choice to focus strictly on one market with a suddenly high demand, the best route will be to continue producing a diverse line of custom springs.