Posted by JULIE CRIDLER
on
12/9/2011 10:17 AM
The IRN Pricing Survey results are in! One of the dynamics we study in our survey is the balance of power between suppliers and their OEM and Tier One customers. Again this year, suppliers are reporting good vibes regarding their own power relative to their customers. Most of the respondents in our survey reported either no change or that their power over their customer had increased since last year. This is likely a lingering result of the restructuring and cost structure rationalizing that was rampant in the supply base during the downturn. Going through that rigorous process gave suppliers a closer, more intimate knowledge of their own cost structures, and along with that came a clearer view of the line in the sand where it does not make sense to cave in to a customer’s demands. Along with being stronger operationally, suppliers have more of a context with which to “take charge” of their customer relationships and this ultimately will lead to more stability within the supply base.
Check back often for more previews of this year's results. Or, if you don't want to wait, order a copy of the report today! Click here to order.
Posted by JULIE CRIDLER
on
10/7/2011 2:25 PM
It is official - the IRN pricing survey is now underway. In the last couple years, the results of our survey have illustrated the point that suppliers have continued to steadily gain both the willingness and the power to say no to a customer’s request for a price reduction. The consequences for refusal have continued to become less dire. But, as everyone who lives in the auto industry knows, things can change dramatically from one year to the next. As the overall economy teeters on the brink of a mild recession, what will we see in the results this year?
Hopefully, Toyota’s recent announcement that they are asking their suppliers in Japan to reduce prices or be replaced (by overseas suppliers) is not a foreshadowing of this year’s survey results. A return to the early days of our pricing survey results – the days where suppliers acquiesced to whatever demands the automakers placed on them – would be a disappointment, to say the least, after the significant progress that has been made. To be fair, Toyota’s move is largely necessitated by the appreciation of the yen against the dollar, which causes them to lose significant operating profit. In some cases the OEM is reportedly asking suppliers to reduce prices by up to 50%. Yikes!
We are eagerly anticipating the survey results this year to see what new trends are appearing. Please take a moment to weigh in on your experiences with customers and prices reduction requests by clicking on the link below and completing the survey. The survey is open for responses through Friday, October 28th.
http://www.think-irn.com/survey11/
Posted by MELISSA ANDERSON
on
9/27/2011 11:28 AM
Headlines in Automotive News this summer paint Mexico as the Mecca of the day for the automotive industry: “Mexico stages comeback as hub for light vehicle output,” “Mexico braces for influx of Japanese suppliers,” “Honda plans $800 million Mexico plant to build subcompacts for North America,” and “Toyota Eyes Engine Factory in Mexico,” are a few examples. This message is being reinforced by Marca Pais – Imagen de Mexico, a public-private initiative “to help promote a positive image of Mexico as a global business partner and an unrivaled tourist destination abroad,” with press releases such as, “Mexican Automotive Manufacturing Market Attracting Global Investments.” But how will the country square this with other trends that are getting less airtime but indicate some headwinds?
The Corpus Christi (TX) Caller Times newspaper published an Associated Press story in May under the headline “U.S. businesses leaving Mexico; Drug violence is costing the country billions.” With escalating drug cartel violence, particularly in the Monterrey area, only half of the US firms surveyed by the U.S.-Mexico Chamber of Commerce said they planned to proceed with new investment plans in Mexico. Problems of cargo theft and graft associated with organized crime are also reportedly widespread enough for companies to consider it part of the ordinary cost of business in the country. An employee at one of IRN’s clients was recently turned down for life insurance on the basis of his occasional travel to their facility in Mexico. The fact that it was too risky for their financial formula was somewhat jarring to him! The Mexican government needs to take serious steps to address personal safety and company security in order to leverage the opportunity currently presented by rising labor costs in China.
Beyond that, we have heard of several instances recently where automotive component suppliers are encountering issues with workforce capabilities at their Mexican plants. It takes stellar systems to be able to set up Mexican capacity that operates in a completely consistent manner to US facilities. Most companies do not have that degree of discipline and are comfortable adapting to local circumstances anyway. Without having all processes completely spelled out and standardized, though, there is a risk, as two stamping companies we know have found, that complex components and assemblies are too difficult for the local workforce to handle. The moral of that story seems to be to assume nothing – make sure that the jobs are appropriate for an environment where low labor costs may also equate to limited skill sets, or that you bring in a systematic training process at the same time.
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HOT TOPICS: AUTOFUTURES FORECAST
Posted by TRACY SCHNEITER
on
8/19/2011 3:35:42 PM
IRN's most recent NA light-duty vehicle production forecast calls for 20% growth in the number of light-duty vehicles produced between 2010 and 2016 by GM, Ford and Chrysler combined. GM is expected to garner the most growth (up nearly 26% by 2016) given their strong product offerings and fuel-efficient powertrain solutions. Despite all the negative press surrounding Chrysler in the recent past, IRN is anticipating continued demand by consumers for Chrysler/Fiat products with production nearing 2 million vehicles in 2016. Meanwhile, Ford Motor has already experienced strong growth and should see a relatively modest growth in the number of vehicles produced by 12%. See below for free data.
If you are interested in learning more in-depth knowledge of who the winners and losers will be over the next couple of years, please contact JulieR@think-irn.com.
AUTOMOTIVE INTELLIGENCE: SNAPSHOTS
AUTOFUTURES® SUBSCRIBER ALERTS:
Posted by THE AIP TEAM
on
5/15/2012
IRN's OEM Assembly Operations Tracking Report (latest release May 15)
IRN publishes a tracking report that lists all North American OEM assembly plants and any scheduled or anticipated plans for downtime or closing. We are always looking for feedback or any plant shutdown updates that you can forward on to us. Please feel free to send either to auto-intelligence@think-irn.com.
Autofutures® Monthly Update (latest release May 2)
This report is our regular commentary on the status of North American sales, the US economy, and our current expectations for vehicle production. You will also find a summary information page on each automaker, displaying the production outlook and other key points.
IRN's Model Tracking Analysis (latest release May 2)
Our user-friendly display of new and major model changes as well as minor model refreshes has been a popular element of our Automotive Intelligence Products.
Autofutures® North American Industry Results (latest release Apr 25)
How is the industry doing? This data-oriented report covers the prior month's results in sales, inventories, and production overall and on an OEM-by-OEM basis.
Autofutures® NA Production Forecast (latest release Apr 18)
As we update the forecast each month, you will find the latest data on the web-based Autofutures Live. If you are using Autofutures Desktop, you will be prompted to run the update to get the most current forecast data installed into your program.
As always, if you have any questions or concerns, feel free to give us a call at (616) 785-5175.
Sincerely,
IRN's Automotive Intelligence Products Team
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