With some form of mandatory limits on carbon dioxide sure to come to the European Union in the not too distant future, relations between car makers and suppliers may actually benefit. Over the past two decades, many car-makers have strained relationships with the suppliers as they have pushed relentlessly for price reductions on parts. At the same time the suppliers have been pressured by increasing commodity costs for their raw materials. Now however the car companies need the help of those suppliers to develop the technology necessary to reduce fossil fuel consumption.

Suppliers are the ones producing new fuel injection systems for both diesel- and gas- fueled cars as well as exhaust after-treatment systems. Going beyond that, technologies like start-stop, electrically-driven accessories and batteries are also being developed by suppliers. The OEMs and suppliers are finding they have to work closely together in order to integrate these new systems to achieve optimum efficiency. Ultimately this will probably be good for suppliers who can produce fuel saving technology as they will be able to charge more and improve their profitability.

[Source: Automotive News - Sub. req'd]

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