Honda, Toyota most preferred by suppliers

Smooth supplier relations have been put to the test over the past three months as automakers scrambled to get their assembly plants back online after the coronavirus shutdown.

But the pandemic's jarring effects on auto production did not dramatically shake the working relations of the six biggest North American automakers with their parts makers, according to a new survey of suppliers.

The study found automakers that have enjoyed positive working relationships with suppliers in the past several years maintained their industry-leading cool when coping with the emergency, while those that haven't performed well as customers in the past did not benefit under the stress of this year's pandemic.

The 2020 North American Automotive OEM-Supplier Working Relations Index Study, an annual survey of supplier sales personnel by the Detroit consulting firm Plante Moran, was conducted during the early weeks of the crisis, from mid-February to mid-April, when production lines were crashing and the future was uncertain.

The study compiled the impressions of 841 salespeople from 503 Tier 1 suppliers on how those companies are getting along with their automaker customers, what it's like to serve each automaker and what impact those working relationships are having on suppliers' business and operations.

Toyota's purchasing operation led the industry this year as it has in every year except for two during the study's 19-year history. Toyota actually widened its gap with other automakers in the ranking, despite the pandemic upheaval.

Honda, the No. 2 automaker in this year's ranking, and No. 3 General Motors both dipped slightly in their supplier relations, the study found. Ford remained little changed in fourth place, according to its suppliers' perceptions.

FCA, which ranked at the bottom of last year's report, moved up slightly to overtake Nissan, in last place, this year.

Plante Moran principal Dave Andrea said two key fundamentals — trust and clear communication — determined which automakers scored well. Andrea said those factors influenced how the six industry supply chains navigated the disruption of the coronavirus crisis.

"If you have communication and processes in place, you should have an advantage going into a major crisis," Andrea told Automotive News, assessing the survey findings. "You also have to have alignment with engineering and manufacturing and all the other touch points that a supplier interacts with."

Plante Moran took over the study in 2019 from industry researcher John Henke's firm, Planning Perspectives Inc.

Toyota performed the best of the six automakers in each of the 22 variables the study monitors.

They include how helpful the automaker is in solving problems, whether the automaker creates hindrances in executing the business, whether the customer supports the supplier's need to make a profit and how knowledgeable the automaker's buyers are about the specific business of the relationship.

Toyota also ranked best in seven of the eight purchasing areas in which the automakers were assessed, including electronics, chassis parts, powertrain components and body-in-white parts. FCA ranked lowest in half of the areas and Nissan ranked lowest in the other half.

Toyota was not ranked at all in the purchasing area of electric vehicles, where it is not active in North America.

Toyota's wide spread of top scores made it the industry's most preferred customer by suppliers, the survey concluded, with Honda at No. 2.

"You have to be good at a wide range of activities," Andrea said.

"You could individually be very good at resolving tooling issues and those types of things, but that's just one element of working together."

Robert Young, group vice president of the purchasing, supplier engineering development and cost planning groups of Toyota Motor North America, said last week that suppliers play an integral role in Toyota's regional and global success.

"We are committed to work more deeply and collaboratively with our partners to develop and build world-class vehicles and mobility solutions for our customers," he said.