Factors that influence Chinese automotive suppliers’ mass customization capabilities

Abstract

China is one of the largest and most rapidly growing automotive markets in the world. In such a dynamic environment, mass customization (MC) is considered crucial to developing and maintaining the competitiveness of automotive suppliers. Literature has suggested that the MC capability of a firm can be achieved by systematically (1) coordinating suppliers, (2) implementing modularity-based manufacturing practices, and (3) postponing key production steps that determine specialized product features and performance. However, since research has also indicated that the Chinese manufacturing context differs substantially from others around the world; it is unclear if these same MC practices are as applicable for Chinese automotive suppliers.This study applies social dilemma and resource dependency theories to explore MC capabilities in Chinese automotive suppliers, and determines that some, but not all, MC practices are pertinent in the Chinese market. The practices which were found to be significant were: tactical alignment increases product and process modularity design; and product modularity design, process modularity design, and supplier segmentation can directly or indirectly increase mass customization capabilities. Relationships between tactical alignment and postponement practices and between postponement practices and mass customization capabilities were not found to be statistically significant in the Chinese context. These novel MC results are valuable since they can help guide automotive manufacturers and suppliers in their expansion into and throughout the Chinese market.