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Are German Automotive Suppliers in the Commodity Trap? Risks and Potentials of the Taiwanese Platform MIH EV Open

Author

Listed:
  • Bernhard Koelmel

    (School of Engineering, Engineering and Management, Pforzheim University, 75175 Pforzheim, Germany
    ISM International School of Management, Chair Strategic Technology & Innovation Management, 75007 Paris, France
    McCoy College of Business, Texas State University, San Marcos, TX 78666, USA)

  • Tim Haug

    (School of Engineering, Engineering and Management, Pforzheim University, 75175 Pforzheim, Germany)

  • Leonie Klein

    (School of Engineering, Engineering and Management, Pforzheim University, 75175 Pforzheim, Germany)

  • Lukas Schwab

    (School of Engineering, Engineering and Management, Pforzheim University, 75175 Pforzheim, Germany)

  • Rebecca Bulander

    (School of Engineering, Engineering and Management, Pforzheim University, 75175 Pforzheim, Germany)

  • Henning Hinderer

    (School of Engineering, Engineering and Management, Pforzheim University, 75175 Pforzheim, Germany)

  • Matthias Weyer

    (School of Engineering, Engineering and Management, Pforzheim University, 75175 Pforzheim, Germany)

  • Tanja Brugger

    (School of Engineering, Engineering and Management, Pforzheim University, 75175 Pforzheim, Germany)

  • Ansgar Kuehn

    (School of Engineering, Engineering and Management, Pforzheim University, 75175 Pforzheim, Germany)

  • Tanja Brysch

    (School of Engineering, Engineering and Management, Pforzheim University, 75175 Pforzheim, Germany)

Abstract

This research paper examines the risks posed by the MIH EV Open platform to German automotive suppliers, in particular, the risk of commoditization and falling into a commodity trap. The term commodity trap describes a situation in which companies dealing with standardized products or services face intense price and margin pressure and struggle to differentiate themselves from competitors. The MIH EV Open platform, established by Foxconn, also known as Hon Hai Precision Industry Co. Ltd., headquartered in Tucheng, Taipei, Taiwan, aims to create a collaborative platform for the comprehensive development of key software, hardware components, and services in the electric vehicle (EV) industry. It unites over 2700 companies from more than 70 countries and fosters collaboration to accelerate the development and market entry of new EV products. This paper analyzes the MIH EV Open business ecosystem model and assesses the strengths and weaknesses of German suppliers in addressing these challenges. This study highlights strategic approaches, including innovation, portfolio adaptation, customer relationships, and sustainability practices, that can enable German suppliers to mitigate commodity trap risks. The findings underscore the importance of proactive, segment-specific strategies amidst the transformation of the automotive industry. Key insights are provided on the potential impact of open platform ecosystems and recommendations for German automotive suppliers to maintain competitiveness. This research fills a gap in the literature by examining the commoditization risks posed by the MIH EV Open platform for German automotive suppliers. Unlike previous studies that focus on traditional market structures, this study explores the novel dynamics introduced by platform ecosystems and provides strategic insights to mitigate these risks.

Suggested Citation

  • Bernhard Koelmel & Tim Haug & Leonie Klein & Lukas Schwab & Rebecca Bulander & Henning Hinderer & Matthias Weyer & Tanja Brugger & Ansgar Kuehn & Tanja Brysch, 2024. "Are German Automotive Suppliers in the Commodity Trap? Risks and Potentials of the Taiwanese Platform MIH EV Open," Commodities, MDPI, vol. 3(4), pages 1-32, September.
    • Handle: RePEc:gam:jcommo:v:3:y:2024:i:4:p:22-420:d:1484414
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