Robot arm works in the automotive production line

How to forge successful partnerships in the automotive supplier industry

EY’s new study “Partnership 2.0. New rules for successful partnerships in the automotive supplier industry” shows what matters in good partnerships.


In brief

  • New EY study published on successful partnerships in the automotive industry.
  • The new study shows why partnerships fail and how to overcome these challenges.
  • In addition, the study provides five guiding principles for successful partnerships.


Recent years were marked by far-reaching disruptions and a plethora of challenges. Unlike in the past, automotive suppliers increasingly prefer partnerships over traditional, capital-intensive acquisition to master these challenges and effectively scale innovative solutions. Since 2016, the number of mergers and joint ventures increased by the factor 3.5. By now, we see seven partnerships for every one acquisition.

More than half of all partnerships in the automotive industry fail

While cooperation can effectively boost performance with regard to revenue growth and profitability, more than half of all partnerships are still failing today. There are manifold reasons for this, which may include an inadequate joint vision, unclear responsibilities and a lack of efficient governance mechanisms and resources.


Almost 60 % of partnerships fail

Making a strategic partnership a success requires a holistic, well-structured approach, from the initial assessment of whether the partnership is the most effective instrument for achieving your own transformation goals, to the detailed design, operationalization and continuous progress monitoring.

A partnership that is set up and thought out well may sustainably boost competitiveness, minimize risk and create valuable access to new markets. But the potential pitfalls are great and the parameters for success have changed. Optimizing the combination of different roles, core competencies and operating models is increasingly important, as is the creation of joint value in the areas of environment, social and governance (ESG).

Cross-industry partnerships have immense power, enabling us to tap into new value creation and partner pools. But partnerships also bring new challenges we need to master to make them succeed.

Partnership 2.0

EY’s study explains, why partnerships fail and which essential challenges need to be mastered.


Summary

The insights described here are derived from EY’s news study “Partnership 2.0. New rules for successful partnerships in the automotive supplier industry“. The study shows why partnerships fail and which essential challenges need to be mastered. In addition, the study contains five guiding principles on how to forge a working partnership and what to consider in preparing a collaboration, selecting potential partners and ways of operating to bring the partnership to fruition.


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