Automotive OEMs Ranked By How They Treat Suppliers
Toyota is tops in an annual study that assesses six major automakers’ relationships with their suppliers. Toyota and Fiat Chrysler Automobiles (FCT), in fact, were the only two OEMs to improve their scores since 2019.
The 20th annual North American Automotive OEM-Supplier Working Relations Index® found Toyota gained 9 points over its 2019 score and was the top performer in all 22 variables measured on the index, such as OEM help, communication and “working together.” Toyota has earned the top spot in the survey every year except two since it began.
“With the unprecedented challenges now facing the automotive industry, the OEMs will be leaning more heavily than ever on their suppliers,” said Dave Andrea, principal in Plante Moran’s Strategy and Automotive & Mobility Consulting Practice, which conducted the study. “The study shows that Toyota knows how to work most collaboratively with its suppliers, is well trusted and therefore is well prepared to face these challenges.”
Following Toyota in the rankings were Honda, GM, Ford FCA US and Nissan. Honda exhibited the biggest decline since 2019, and FCA showed the greatest improvement. Plante Moran’s Andrea noted that all OEMs are facing significant challenges in 2019.
“So far this year, the OEMs and their suppliers have gone through some of the toughest economic times in their history,” Andrea said. “Operational and financial recovery will be a challenge for everyone. The OEMs’ and auto suppliers’ finances are stretched to the limit by the cost of restarting production and further threatened by slow sales and fluctuating market demands.
“This means that the OEMs will have to rely even more heavily on their suppliers, and trust — combined with open and honest communication and strong relationships — will be critical to their success. I think it’s safe to say that those automakers who already have good relations will have an advantage over those with poor relations.”
Go here to see more takeaways from the study.