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

Bernhard Koelmel (), Tim Haug, Leonie Klein, Lukas Schwab, Rebecca Bulander, Henning Hinderer, Matthias Weyer, Tanja Brugger, Ansgar Kuehn and Tanja Brysch
Additional contact information
Bernhard Koelmel: School of Engineering, Engineering and Management, Pforzheim University, 75175 Pforzheim, Germany
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

Commodities, 2024, vol. 3, issue 4, 1-32

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.

Keywords: MIH EV Open; Foxconn; commoditization; automotive supply industry; ecosystem; platform economy (search for similar items in EconPapers)
JEL-codes: C0 C1 C2 C3 C4 C5 C6 C7 C8 C9 D4 E3 E6 F0 F1 F3 F4 F5 F6 G1 O1 O5 Q1 Q2 Q4 (search for similar items in EconPapers)
Date: 2024
References: View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.mdpi.com/2813-2432/3/4/22/pdf (application/pdf)
https://www.mdpi.com/2813-2432/3/4/22/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jcommo:v:3:y:2024:i:4:p:22-420:d:1484414

Access Statistics for this article

Commodities is currently edited by Ms. Wendy Yu

More articles in Commodities from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().