Toyota, BMW on top
The annual report also names the top automakers to work with based on feedback from suppliers. Toyota tied for first with BMW, both earning 627 out of a possible 1,000 points. BMW, however, was the more consistent performer of the two across regions. It took first place in North America and second in both Europe and Asia, making it the only automaker to secure a top-three position in the world’s three largest markets.
The top two, however, did not score as well as they did last year. Both BMW’s and Toyota’s global ratings remain significantly below their SuRe index scale highs (712 for BMW in 2006 and 697 for Toyota in 2007), providing further confirmation of deterioration in automaker-supplier relationships.
JLR, Great Wall gain
There were some winners in the latest index. With a 16 percent improvement in 2014, Jaguar Land Rover established itself as the “most trustworthy” automaker. It offers, for example, a more comprehensive protection of its suppliers’ intellectual property, according to the report. Another winner was Chinese manufacturer Great Wall Motors, which improved 47 points to 518, putting it just behind VW brand (525) and Hyundai (524).
Suppliers are less confident than they had been about their opportunities to expand their business, expressing particular concern about future opportunities with Hyundai-Kia and VW Group. IHS forecasts suggest that compound unit sales growth for these two automaker groups will drop from double-digit figures seen in 2009-2013 to low single digits in 2014-2018, “corroborating the idea that the bonanza years for suppliers exposed to these customers could be soon drawing to an end,” the report said. Ranking at the bottom of the index were India’s Mahindra & Mahindra and Tata, along with AvtoVAZ of Russia. Each earned less than 400 points, well below the industry average of 504.
Suppliers also identify automakers’ as having what IHS terms a “lukewarm” response to global recalls and quality management troubles. “Recent recall fears do not seem to have translated into greater attention to in-bound quality,” Fini said in the report. “Suppliers have indicated that all carmakers, apart from Subaru and a few of the Chinese manufacturers, have actually become more lenient with regard to quality in terms of PPM levels, testing requirements and product or process validation. Even best-in-class carmaker BMW seems to have backtracked on this point compared with last year, with lower ratings of quality demands,” he said.
Surveyed suppliers said that the focus on cutting costs is affecting quality. For most volume carmakers, including VW, Fiat Chrysler, Ford, General Motors and Renault, cost pressures on the supply base are increasingly overriding the quality performance demanded of their suppliers. As one supplier told Fini: “It’s all about cost. Therefore, is purchasing or engineering leading quality?”