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Supplier Relations

Summary of OEM-Supplier Relationship Survey

Barcelona 6th May 2005

Automotive News Europe/SupplierBusiness.com


Supplier Relations

Three key questions

‰ How do suppliers see their car maker partners?

‰ Who do they want to work with and why?

‰ What does that mean for the different car makers?

OEM-Supplier Relationship Survey 2005 Automotive News Europe/SupplierBusiness.com


Pricing

„ Ford is placing greatest emphasis on price of parts –


Honda, BMW and Toyota the least
Pressure to reduce prices

OEM-Supplier Relationship Survey 2005 Automotive News Europe/SupplierBusiness.com


Quality

„ BMW and Toyota are the most demanding on quality,


Fiat and SEAT the least

OEM-Supplier Relationship Survey 2005 Automotive News Europe/SupplierBusiness.com


Technology

„ German luxury makes emphasise product technology


heavily – Fiat and GM Europe less so

OEM-Supplier Relationship Survey 2005 Automotive News Europe/SupplierBusiness.com


Which carmaker is preferred as customer? (1)

„ Toyota and BMW – and not Ford, Fiat or General Motors

OEM-Supplier Relationship Survey 2005 Automotive News Europe/SupplierBusiness.com


Which carmaker is preferred as customer? (2)

„ Toyota, BMW, Mercedes-Benz


W hich customer is most attractive to do business with?
1.6

1.4 Toyota B MW

1.2 M-B
R enault
1 V olvo PSA
H onda
Audi N issan
0.8
VW
0.6

0.4

0.2 Š koda

-0.2

-0.4
S E AT
-0.6 Ford
GME

Fiat
-0.8

OEM-Supplier Relationship Survey 2005 Automotive News Europe/SupplierBusiness.com


Why?

„ Difficult to make money with General Motors, Ford or


Fiat – while BMW and Toyota offer acceptable returns

OEM-Supplier Relationship Survey 2005 Automotive News Europe/SupplierBusiness.com


Why is it difficult to make money?

„ Unpopular carmakers do not reward cost saving ideas

OEM-Supplier Relationship Survey 2005 Automotive News Europe/SupplierBusiness.com


Why is it difficult to make money?

„ Their adversarial contract negotiations are an extra cost

OEM-Supplier Relationship Survey 2005 Automotive News Europe/SupplierBusiness.com


Why is it difficult to make money?

„ They do not support suppliers to overcome challenges

OEM-Supplier Relationship Survey 2005 Automotive News Europe/SupplierBusiness.com


Why is it difficult to make money?

„ They do not offer suppliers healthy, predictable volumes

OEM-Supplier Relationship Survey 2005 Automotive News Europe/SupplierBusiness.com


Suppliers do not feel respected

„ Some car makers are not winning supplier support

OEM-Supplier Relationship Survey 2005 Automotive News Europe/SupplierBusiness.com


Suppliers do not have confidence in these
carmakers
„ Suppliers see greater danger of their products and
innovations being copied

OEM-Supplier Relationship Survey 2005 Automotive News Europe/SupplierBusiness.com


Implications for OEMs

„ Suppliers can shift their customer base

OEM-Supplier Relationship Survey 2005 Automotive News Europe/SupplierBusiness.com


Methodology

„ Survey undertaken in March and April

„ Results cover 15 major car maker brands

„ Responses from 84 suppliers in Europe

„ Full results available from SupplierBusiness.com shortly


as special supplement

„ Contact colin.whitbread@supplierbusiness.com

OEM-Supplier Relationship Survey 2005 Automotive News Europe/SupplierBusiness.com