What Is Tier One Automotive?


Quick Answer

"Tier one" refers to a type of automotive supplier. Tier-one suppliers sell parts and materials directly to the original equipment manufacturers that create finished automobiles, such as Ford or Dodge.

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Full Answer

The tier ranking of a supplier refers to how close it is in the supply chain to the original equipment manufacturer. Tier-one companies are the closest in the supply chain and usually supply completed parts, such as sensors or switches. Raw materials come from farther down the supply chain, ranging down to companies that are considered tier-three or four suppliers. A company may be a tier-one supplier to one particular equipment manufacturer and a tier-two supplier to another.

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