Relations between automakers and suppliers are deteriorating largely because of intensifying cost-cutting demands, according to a new survey.
Vehicle manufacturers are looking for annual price reductions of as much as 10 percent, parts makers revealed in the 2014 Global OEM-Supplier Relations Study conducted by consultant IHS Automotive.
"With few exceptions, even the best performing carmakers have become more stringent on controlling costs in 2014, signaling a general shift for the automakers toward greater cost focus and more aggressive ways to capitalize on their negotiation leverage with suppliers," Matteo Fini, the study's lead author, wrote in the report.
The standard annual price reduction by automakers is about 2 to 3 percent, but IHS says it is not uncommon for them to seek cuts of 5 percent or more.
"Suppliers seem to accept the notion that they have to find innovative ways to generate savings on a year-over-year basis, however, they find it difficult to accept that they receive little or no support from the OEMs in doing so. This lack of support often results in strained relations between the two parties," Fini wrote.