Short answer
In the auto industry, a Tier 1 supplier sells directly to a vehicle maker, a Tier 2 supplier sells to Tier 1 suppliers, and a Tier 3 supplier sells raw materials or basic components to Tier 2 suppliers. A plant’s tier depends on who its customers are, not on its size or what it makes.
Key facts
- Tier 1
- Sells to the vehicle maker (OEM)
- Tier 2
- Sells to Tier 1 suppliers
- Tier 3
- Sells materials and basic parts to Tier 2
The three tiers
| Tier | Sells to | Typical products |
|---|---|---|
| Tier 1 | Vehicle makers (OEMs) | Complete systems and modules: seats, harnesses, brakes, powertrain assemblies |
| Tier 2 | Tier 1 suppliers | Components: stampings, machined parts, castings, connectors, sub-assemblies |
| Tier 3 | Tier 2 suppliers | Raw and semi-finished material, coatings, fasteners, basic parts |
Why the tier matters when you buy
- Quality systems: OEMs usually require certified quality systems of Tier 1 suppliers and pass those requirements down. Ask what your plant’s customers require of it.
- Approval route: a part approval (PPAP) often runs through the Tier 1 that buys the part, not the OEM.
- Price and volume: Tier 2 and Tier 3 plants often work to a Tier 1’s drawings and volumes, so lead times follow those programs.
Telling a Mexican plant’s tier
Registries do not record a plant’s tier. DENUE gives activity code and staff band; the IMMEX directory gives an export program. Staff size is a weak guide: in the Bajío, 90 of 98 harness plants have 51 or more staff, while 245 of 277 machine shops have fewer than 51.
The reliable way is to ask: who are your three largest customers, which parts do you make for them, and can I speak to one? See the verification guide for the other checks.
Frequently asked questions
What is a Tier 2 supplier?
A Tier 2 supplier sells components or sub-assemblies to Tier 1 suppliers instead of to the vehicle maker. Typical Tier 2 products are stampings, machined parts, castings and connectors. A plant can be Tier 2 for one part and Tier 1 for another, so ask which customers it serves.
What is the difference between Tier 1 and Tier 2 suppliers?
A Tier 1 supplier sells directly to a vehicle maker, usually complete systems such as seats or harnesses. A Tier 2 supplier sells to Tier 1 suppliers, usually components. The difference is who the customer is, not how large or how capable the plant is.
How do I find out which tier a Mexican plant is?
No public registry records a plant’s tier. Ask the plant for its three largest customers and the parts it makes for each, then ask to speak to one of them. DENUE and the IMMEX directory show activity, size and export program, which are useful but not proof of tier.