Toyota outranks other automakers in supplier relations, with Ford and Stellantis seeing a downturn, amidst escalating cost and trust issues.
In a recent study by Plante Moran, Toyota Motor North America has been crowned the leader in supplier relations among North American automotive Original Equipment Manufacturers (OEMs). The company achieved an overall rating of 'good to very good', scoring 386 points, a significant improvement from last year's score of 338.
The annual North American Automotive OEM Supplier Working Relations Index study evaluates various aspects of OEM-supplier relationships, including cost, communication, responsiveness, and engagement. According to the study, the cost aspect is the number one driver of suppliers' scores for each OEM.
Toyota's improvement in the index is noteworthy, as it outperformed other automakers, including Ford, General Motors (GM), Honda, Nissan, and Stellantis (FCA). Ford dropped down the rankings every year since 2020 to reach 191 this year, firmly in the 'poor to very poor' range. On the other hand, GM moved up the ranks this year, surprising Plante Moran, despite facing similar supply chain uncertainty as Ford and Stellantis.
Nissan's score dropped from its high of 255 in 2024 to 249 this year, while Honda increased from 331 to 344 points. Interestingly, Stellantis hit the lowest score at 141, down from 152 last year.
The top three OEMs – Toyota, Honda, and GM – scored better in communication, responsiveness, accessibility, engagement, and buyer knowledge. Suppliers reported feeling like a true partner 12 times more for the top 3 OEMs versus the bottom three.
According to the study, varying strategies will be employed by OEMs to mitigate against tariffs. Some OEMs, such as Toyota, are positioned better to withstand tariffs, while others may struggle. The financial support provided by OEMs in response to tariffs will influence how suppliers view them, according to Mark Barrott.
The response to changing EV consumer demand by OEMs can greatly affect trust, according to suppliers in the latest few studies by Plante Moran. Better communication is needed from OEMs regarding EV investment and handling sunk costs, according to Andrea.
Suppliers also see opportunities to drive more internal alignment with multi-regional operations at Toyota and Nissan, according to Johnson. However, they want both the stability and the consistency from Japan headquarters, but more regional autonomy in the US-based operations at Toyota.
The timing of the survey may have influenced the impact of tariffs on the index, according to Johnson. Some OEMs are positioned better to adapt to changing market conditions, and their supplier relationships may reflect this adaptability.
In conclusion, Toyota's strong performance in the Plante Moran Index highlights the company's commitment to maintaining positive relationships with its suppliers. As the automotive industry continues to evolve, it will be interesting to see how these relationships develop further.
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