My career started at Ford. Being inside a vehicle manufacturer that early teaches you something you never quite pick up from the outside. An automotive OEM does not buy products. It buys certainty against a date.
Every conversation in that environment traces back to the same place. The build date. Volumes, tooling, validation, supplier selection, cost targets, capacity, all of it hangs off a calendar that was set years before anyone rings a supplier. When I moved to the other side of the desk and started selling powertrain and components into Scania, Volvo, MAN and Detroit Diesel, that was the most useful thing I owned. I was selling to their calendar rather than mine.
Most manufacturers approach an OEM the opposite way. They lead with the product, the certifications and the price, and they time the approach around their own financial year. Then they cannot work out why a technically better component lost to an incumbent that costs more.
There are two moments when an automotive OEM is genuinely open to a new supplier. The next programme, and a live problem on a current one. That is the whole list.
The next programme is the clean route and it is slow. Component decisions are taken long before the vehicle is public, and by the time a programme is being talked about in the trade press the supplier list has been settled for a long time. If you want a seat you have to be in the engineering conversation while the architecture is still moving, which means being known to the engineers before there is anything to quote.
The live problem is the fast route and almost nobody works it deliberately. A supplier misses a quality target. A part goes obsolete. A single source becomes a risk the OEM is no longer willing to carry. Capacity falls short of a volume increase. In every one of those cases the OEM needs an answer in weeks rather than years, and the company that gets called is the one already known, already assessed and already sitting in the system as a credible alternative. That position is built quietly in the years when there is nothing to bid on.
Being written into the build standard is the single biggest lever you have and it tilts the odds hard in your favour. It is not the only route. Plenty of business gets won by suppliers who were never in the original design, on obsolescence, on capacity, on a second source mandate after a supply shock, or on a straight commercial case during a cost reduction programme. Treat both as one campaign, not as alternatives.
This is where I watch good manufacturers get hurt, and it is the part I understood early because I saw it from the buying side.
Automotive is one of the few sectors where your price is contractually agreed to fall. Annual productivity reductions are normal and they are written down. A public example from a Ford supply agreement of that era set a one off five percent reduction followed by an annual productivity based reduction of three and a half percent, with further annual adjustments after that. Three percent a year has been a common industry expectation for a long time. If you price the first year on a margin you are comfortable with, and you have not built a real cost reduction path of your own, year four is where the programme starts eating you.
Tooling is the second trap. On many programmes the OEM funds the tool, capitalises it, and leaves it sitting in your factory under a bailment arrangement while you maintain and insure it. On others you fund it and recover the cost as a per part amortisation spread over a volume that was only ever an estimate. Understand which model you are agreeing to, and what happens to your recovery if the programme runs short.
In most industries you win a contract. In automotive you win a place on a schedule, and the schedule belongs to somebody else.
The number in the business case is a forecast. It is not a commitment, and suppliers who read it as one get caught.
Automotive purchasing typically runs through a blanket order that sets the terms, with actual quantities coming later as releases against it. The volumes in the blanket order are commonly described as estimates based on the customer's own forecasts and expressly not guaranteed. The point was tested in the United States when the Michigan Supreme Court held that a blanket order without a firm quantity term operates as a release by release contract, which cut both ways. The supplier was not locked into supplying future volume it had not accepted, and the buyer had no guaranteed source.
That reality has to be priced. You are being asked to hold capacity, hold tooling, hold inventory and hold a validated process against a number that can move. Build the commercial case on the volume you can survive, not the volume in the presentation.
I have sold into both, and the mistake is assuming the heavy vehicle side works like the car side at lower volume. It does not.
Truck, bus and off highway programmes run smaller numbers over much longer lives. There is more genuine engineering dialogue and less pure cost pressure, because the operator is buying uptime and total cost of ownership rather than a monthly payment. Your technical case actually gets heard. In exchange you accept a longer qualification and a service obligation that runs well past the end of production, commonly ten to fifteen years of parts supply written into the contract.
That obligation is a cost line to the finance director and an opportunity to anybody who thinks properly. Fifteen years of guaranteed demand on a part that only you are qualified to supply is the most defensible revenue in the sector. It is also where the margin sits once the annual reductions have ground the production price down. Plan the aftermarket before you sign the production business, not after.
So the short version is this. Sell to the programme calendar. Know which of the two entry moments you are working. Price the whole life of the deal including the reductions you have already agreed to. Read the tooling model. Treat the volume as an estimate. Build the aftermarket position on day one.
Do that and an automotive OEM is a very good customer for a very long time. Skip it and you win a platform that slowly costs you money.
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