Nissan Leapfrogs Ford Behind Toyota, Honda in Supplier Survey

May 12, 2014 2:06 am ET

May 12 (Bloomberg) -- Japanese automakers cultivated stronger working relationships with parts suppliers than their U.S. rivals in an annual survey, as Nissan Motor Co. beat Ford Motor Co. to take third place for the first time in five years.

Nissan, Honda Motor Co. and Toyota Motor Corp. all improved their scores, according to Planning Perspectives Inc., which conducted the survey. Ford, Chrysler Group LLC and General Motors Co. all posted declines. Toyota gained for the second straight year for its best score since 2011. Honda had its first improvement after six years of declines, according to the survey due to be released today

The Japanese automakers’ lead over Detroit is much less than it was a decade ago, when the difference helped explain the market-share gains coming at the expense of the U.S. companies. The study, now in its 14th year, asks suppliers in North America to rate their interactions with automakers. With 70 percent of vehicle parts and components coming from suppliers, their perceptions can have a “profound impact” on the auto industry, said John Henke, chief executive officer of Planning Perspectives, in Birmingham, Michigan.

Suppliers “have a choice of who they take new technology to,” Henke said. “We’ve seen that the automakers with the best relations get the better people and the best resources.”

The survey asked companies supplying parts to carmakers to rate their interactions across six major purchasing areas, including chassis, powertrains, exteriors and interiors.

Toyota Ranking

While Toyota was No. 1 with a score of 318, the Toyota City, Japan-based company was well below its record of 415 in 2005 and 2007.

“Our suppliers have been, and always will be, instrumental to our success,” Robert Young, Toyota’s head of purchasing for manufacturing operations in North America, said in a statement. “We are encouraged by these results and look forward to continuing our efforts to strengthen relationships with our supplier partners.”

Chrysler and GM, with scores of 245 and 244, were considered to have “poor” relationships with suppliers. A tally of 250 to 350 is deemed “adequate” by Planning Perspectives.

“It has been a very challenging year for us and our supplier partners due to our continued production growth and transition to a new purchasing and finance solution,” said Scott Kunselman, senior vice president for purchasing and supplier quality at Auburn Hills, Michigan-based Chrysler.

Chrysler’s Efforts

The company, which is now wholly owned by Fiat SpA, isn’t satisfied with its worsening score and has taken steps to “proactively identify and work through issues,” Kunselman said in an e-mailed statement.

GM fell out of the “adequate” category with its first decline in six years. The Detroit-based automaker, which exited bankruptcy in 2009, has more than doubled its standing with suppliers since bottoming out in 2005.

“Our leadership team is committed to nurturing strategic supplier relationships and we are pleased that the supply base has acknowledged our efforts and priorities,” said Grace Lieblein, vice president of the company’s purchasing and supply chain.

Ford Falls

Ford, based in Dearborn, Michigan, scored 267, from 271 a year earlier.

“We are honored to be recognized by our valued supplier partners but also see opportunities for improvement,” Kristina Adamaski, a Ford spokeswoman said in an e-mailed statement.

The moves by Ford, GM and Chrysler are statistically insignificant, Henke said.

“We’re in the midst of a cultural change that is sweeping in nature, and the message and tone needs to start at the top,” he said.

Including the German automakers, Bayerische Motoren Werke AG would have placed second overall; Daimler AG would have fallen from to eighth from third and Volkswagen AG would have finished last for the second straight year, according to the research.

Planning Perspectives surveyed 411 sales representatives from 362 direct suppliers in March and April, on areas such as trust, communication, helpfulness in engineering and the opportunity to make a profit. Last year, the firm polled 583 sales representatives and engineers from 441 direct suppliers.

The parts produced by suppliers, such as instrument panels, seats, axles and navigation systems, typically make up more than two-thirds of a vehicle’s value, Planning Perspectives has said.

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2014      Automaker       

1         Toyota          3         Honda              6         Chrysler        8         Daimler         Volkswagen      
To contact the reporter on this story:
Mark Clothier in Southfield, Michigan at mclothier@bloomberg.net
To contact the editors responsible for this story:
Jamie Butters at jbutters@bloomberg.net
Niamh Ring