Automotive suppliers need to "up their game" in negotiation strategies with OEMs amid a market moving toward electric vehicles, an analysis by Plante Moran showed.
Whether suppliers are Tier 1, 2 or 3 in the automotive supply chain, vehicle manufacturers drive the business conditions in the industry, Dave Andrea, principal at Plante Moran said during a July 26 webinar hosted by the Manufacturers Association for Plastic Processors.
"Through all the simultaneous business supply chain interruptions we've had over the last two years or so, we've really seen how relationships are the most plausible way to create options out of the chaos," Andrea said. "With the right attention and investments, supplier relations can improve throughout crises.
"All the OEMs face similar challenges," he added. "Certainly to different extent depending on what their product portfolio was and how many product launches they had. But basically everybody has been dealt the same deck of cards."
Plante Moran surveyed companies to measure the quality of relationships in 2,226 buying situations within the supply chain. According to the anonymous survey, no OEMs had perfect interactions with suppliers.
The supply base ranked Toyota on top, with consistency across all its purchasing groups and the lowest percentage of poor or very poor rankings, at just 19 percent. Stellantis, at the bottom of the list, received 84 percent "poor or very poor" rankings from suppliers.
General Motors ranked in the middle and had the most consistency across purchasing groups with 41 percent "poor or very poor" rankings.