Global Study on Automaker-Supplier Relations
October 27, 2014Heightened friction between original equipment manufacturers (OEMs) and suppliers on cost reduction matters is the main factor behind the deterioration of relations between automakers and suppliers globally in 2014, according to suppliers who took part in the annual Global OEM-Supplier Relations Study (SuRe) conducted by IHS Automotive.
The global survey allows automotive suppliers to rate carmakers on a variety of matters, including technology sourcing, profit-impacting factors, quality management and intellectual property protection matters.
2014 study highlights include:
• Nearly 75% of carmakers have received lower ratings than in 2013, with an average SuRe index rating reduction of 2.8%. Profit potential ratings were down by 5.4% on average in 2014 vs. 2013.
• Toyota’s marginal improvement in 2014 is enough to secure the Japanese carmaker the first position in the SuRe index ranking, closely followed by BMW, which was also rated second in 2013. Despite occupying the top positions, both BMW’s and Toyota’s ratings remain significantly down compared to 2006 and 2007 highs (712 and 697 in the SuRe index scale respectively), confirming a shift in the way they handle relations with suppliers.
• Ratings for Hyundai, Kia and Volkswagen (and its controlled brands) suggest suppliers are less confident about their opportunities to win more business with these carmakers in the future, possibly linked to reduced growth prospects.
• OEMs pushing the boundaries of cost reduction with several suppliers highlighting the return to unwelcome practices, such as annual price reduction targets, which they deem unsustainable.
• Jaguar Land Rover named Most Trustworthy. Jaguar Land Rover, PSA and Chinese carmakers (Great Wall in particular) are among the winners of this year’s study, all for different reasons. With a 16% improvement in 2014, Jaguar Land Rover establishes itself as the most trustworthy OEM.
• OEMs’ lukewarm response to global recalls and quality management misalighments. One supplier put it bluntly: “it’s all about cost - Is Purchasing or Engineering leading quality?”
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