WOLFSBURG, Germany -- Volkswagen Group suppliers seem keen to avoid more disputes with the company even as they face growing pressure from the automaker to accept price cuts.
Two German suppliers halted parts deliveries to VW in August to protest cancellation of a contract by the carmaker, disrupting production at six German plants.
VW, grappling with billions in costs from its diesel-emissions scandal and a strategic shift to electric cars, has said it will review procurement strategy to avoid any repetition of the crippling dispute.
At a suppliers' fair in Wolfsburg on Tuesday, parts makers sounded eager to cooperate.
Christoph Kaune, key account manager at U.S.-based Maxion Wheels which supplies steel and aluminum wheels to VW, said cost-cutting pressures at the German group are "extremely high" and it is tough to get it to agree on compensation for fluctuating steel prices.
"It's very difficult to find a fair compromise but VW is one of our biggest customers," Kaune told Reuters at the international suppliers' fair. "That's what really matters."
Marek Poskart of Canada's KSR International Co., a maker of fixed pedal modules and automotive sensors, agreed.
VW is seeking to extract greater price cuts from suppliers than in the past, he told Reuters, but the negotiations are fair and KSR has started to improve development processes to better meet VW's price targets.
"If your cost structure is plausible you will have no difficulties with VW," Poskart, a sales director, said. "It's a give-and-take."
VW is not only squeezing down prices but has also reduced orders, a sign of its push to cut costs by tackling complexity in r&d, said Kai Rohrbach, a manager at GOM GmbH which makes 3D scanners and software in Brunswick near VW's Wolfsburg headquarters.
"In the past they sometimes bought four to five systems at once but now it's only about two at a time," he said.
When he opened the biannual event on Monday, VW CEO Matthias Mueller warned that carmakers and suppliers would only together be able to cope with "the epochal change" driven by electric cars and autonomous driving.
"We want to be successful with you together," the CEO said. "That's the only way that it can work."