Automotive Engineering - August 2023 - 6

TECHNOLOGY REPORT
carving out their pure ICE products and
divisions to focus their investments on
EVs. Other suppliers are making minimal
EV-related investments and/or re-shuffling
their product mix.
The number of component providers
Image shows the year-over-year and the nine-year recap of automakers' performance based on findings from
the 2023 WRI study. Attributes measured by the WRI study highly correlate to the benefits OEMs receive from
suppliers, including competitive pricing, investment in technology, and better program launch support.
is expected to decline as the EV transition
unfolds. " There will be mergers and
acquisitions as companies, particularly in
the ICE powertrain area, are de-sourced
and revenues go down, making consolidation
attractive, " Andrea concluded. For
companies producing EV components,
the firms unable to grow resources fast
enough are likely to acquire technologies
as well as add workers and production
capacity via mergers or acquisitions.
The WRI study is based on online responses
collected from mid-February to
mid-April 2023, reflecting input from 715
salespeople at 459 Tier 1 companies. The
survey addresses suppliers' perceptions
of their relationships with Ford, General
Motors, Honda, Nissan, Stellantis, and
Toyota. Respondent firms, accounting
for approximately 50% of the six OEM's
annual purchases, represent 38 of the
Top 50 North American suppliers.
The respected WRI study has repeatedly
shown that timely communication
and effective product-development involvement
are cornerstones to good
working relations. " When we ask suppliers
which OEMs engage the suppliers most
effectively in the product development
process, the best-to-last order is Honda,
" The automakers will have to continue building on these fundamentals to survive near-term parts
shortages, rising costs, and high risk to truly deepen supplier relations to support their transition to
electric vehicles, " said Plante Moran's Dave Andrea.
a plant standing idle just waiting for an EV
program to come to fruition, " Andrea told
SAE Media. The most likely outcome from
an EV information 'desert:' suppliers will
continue to focus on existing ICE production
orders and investments.
" OEMs and suppliers must focus on
defining the long-term EV strategy, " said
Andrea. In the meantime, suppliers are
dealing with many financial headaches,
including supply-chain disruptions, soaring
raw-material prices and inflationary
6 August 2023
costs. " Unanticipated inflation has spilled
over to labor, transportation, energy and
other inputs, and this industry isn't strong
at managing these issues, " Andrea said.
While the legacy automakers are supporting
their march to electrification
with ICE-powered vehicle sales, suppliers
essentially are left in a state of flux.
" Private-equity firms are looking to consolidate
some sectors to keep volumes
and scales up in traditional ICE sectors, "
said Andrea. Many large suppliers are
GM, Toyota, Ford, Nissan and Stellantis.
" The challenge for automakers is balancing
cost competitiveness with strong supplier
partnerships by identifying lead suppliers
on platforms early, " Andrea said.
For a record 13th time, Toyota ranked
tops in the annual study, followed in
order by Honda, GM, Nissan, Ford, and
Stellantis. WRI scores dropped slightly
for Toyota and Honda. Ford's scores
dipped significantly, while GM, Nissan,
and Stellantis improved.
Stellantis had the biggest gain yearover-year,
going from 128 to 145 points.
" Stellantis' 17-point increase was driven
by a leadership change that reoriented
their practices toward building partnerships, "
noted Andrea.
Kami Buchholz
AUTOMOTIVE ENGINEERING
BOTH IMAGES: PLANTE MORAN

Automotive Engineering - August 2023

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