Automakers have learned how to reduce what they pay for parts, but are still struggling to limit the engineering and development demands they place on suppliers.
"Integrated purchasing is driving down prices, but automakers need to have the discipline to drive down engineering requirements," said Jose Maria Alapont, president, Delphi Europe, Middle East and Africa and vice president, Delphi Corp.
Alapont was one of six automaker and supplier purchasing executives on a Monday panel at the Automotive News Europe Congress in Gothenburg, Sweden, that explored what the industry has learned from purchasing joint ventures.
One of the biggest problems so far with purchasing joint ventures has been a tendency for automaker engineers to make repeated and late engineering changes after common platform purchasing contracts have been negotiated, Alapont said.
Original-equipment manufacturer engineers can always improve on setting specifications early and keeping them, said Steve Armstrong, senior vice president of purchasing at Volvo Car. Volvo and other members of Ford's Premier Automotive Group were improving, he said. "But do we fix specification early and stay with them? No. We need to improve."
Panelists agreed that purchasing joint ventures would continue because they offered great advantages.
"Common components are where the cost savings are," said Anders Svensson, executive director of GM-Fiat Worldwide Purchasing Sweden. His group has learned to change its approach to fit each of its General Motors "customers" - the Opel and Vauxhall brands, Saab, Fiat, and GM-Fiat Powertrain.
Volvo has not only saved on component costs, it has also learned from parent Ford how to improve quality and has adopted several best practices from Ford, Armstrong said.
Renault also learned much from its alliance with Nissan, said Paul Besancon, executive secretary, Renault-Nissan Purchasing Organization.
"Our partner Nissan was far ahead of us on quality, especially longevity and durability," he said. Nissan is also punctual in its development process.
"Western OEMs are always late -- maybe only a week or two, but it delays programs and raises costs," Besancon said. "Nissan is amazing on managing schedules."
Lear has reorganized itself in response to purchasing joint ventures, adding product-oriented groups to its customer-oriented groups.
"They develop products that can be sold to multiple manufacturers and multiple brands within groups," said Douglas DelGrosso, Lear's executive vice president of international operations.
Faurecia sees expansion into North America as "very desirable" because individual car-line volumes are larger there, said Pierre Levi, chairman and CEO of the French supplier.
"There are fewer specialty vehicles there," he said. "Further market fragmentation is likely in Europe. That adds to cost."
The panel saw several potential areas for purchasing and manufacturing savings in the next several years.