SupplierBusiness : Supplying Audi

Table of Contents

1. OVERVIEW OF THE CAR MAKER

• 1.1 An incubator of human capital and industrial practices
• 1.2 Keeps VW in the black and liquid
• 1.3 Better sales momentum than its peers in Europe and US
• 1.4 First premium car maker in China
• 1.5 No scale-back on expansion plans of product line-up, even if...
• 1.6 Implications of the VW-Porsche merger

2. PRODUCTION STRATEGY

• 2.1 Production concentrated in Germany
• 2.2 No North American production for the moment
• 2.3 Expansion of China operations
• 2.4 Small Indian CKD operations
• 2.5 Flexible saturation of capacity
• 2.6 Modular Platform strategy
• 2.7 Increased vertical integration with more in-house operations?
• 2.8 Other implications of the modular platform strategy
• 2.9 Collaboration with Porsche set to increase

3. PURCHASING STRATEGY

• 3.1 Increasing strategic importance of the Purchasing function
• 3.2 The strengths Audi' s Purchasing function
• 3.3 Other consequences of the modular platform approach on purchasing

• 3.4 Supplier Selection
  • 3.4.1 European suppliers more likely to become partners
  • 3.4.2 Procurement focus regions
  • 3.4.3 Opportunities with global sourcing
  • 3.4.4 Supplier selection with the new modular platform approach
  • 3.4.5 Reduction of critical suppliers at a group level
  • 3.4.6 New locations for raw material

• 3.5 Pricing policy
  • 3.5.1 Looser pricing policy...
  • 3.5.2 ...maybe short-lived
  • 3.5.3 Little room for mark-up by suppliers
  • 3.5.4 Areas of improvement

• 3.6 Approach to quality
  • 3.6.1 Less demanding than BMW and Daimler
  • 3.6.2 Enhanced organisation for quality assurance
  • 3.6.3 Spreading of practices from VW

• 3.7 Research and development
  • 3.7.1 Successful stories of partnership in R&D...
  • 3.7.2 Lower R&D investment to harm Vorsprung durch Technik?
  • 3.7.3 Keeping in-house product development
  • 3.7.4 Building up expertise for hybrids, but...
  • 3.7.5 ...Diesels have the most potential
  • 3.7.6 R&D focusings and opportunities for suppliers

• 3.8 Modules and systems
  • 3.8.1 Less freedom in outsourcing of modules and systems
  • 3.8.2 Faurecia main supplier of modules

4.OEM-SUPPLIER RELATIONS SURVEY RESULTS FOR AUDI

• 4.1 Negotiations
  • 4.1.1 Time-consuming negotiations
  • 4.1.2 Demands for price reductions
  • 4.1.3 Rating of payment terms
  • 4.1.4 Keeping agreements on price
  • 4.1.5 Willingness to reward cost saving ideas
  • 4.1.6 Willingnesss to pay for development costs

• 4.2 Quality
  • 4.2.1 Demands to achieve high quality
  • 4.2.2 Demands for testing and validation
  • 4.2.3 Product liability guarantees

• 4.3 Technology
  • 4.3.1 Demands for best product technology
  • 4.3.2 Technical competence
  • 4.3.3 Opportunities for return on investment
  • 4.3.4 Use of modules
  • 4.3.5 Development of systems with suppliers

• 4.4 Organisation
  • 4.4.1 Quality of communication
  • 4.4.2 Support in avoiding problems
  • 4.4.3 Quality and stability of volume planning
  • 4.4.4 Preparation for model launch
  • 4.4.5 Level of redesign required

• 4.5 Trust
  • 4.5.1 Trust in commercial partnerships
  • 4.5.2 Level of protection for suppliers' intellectual property

• 4.6 Attractiveness
  • 4.6.1 Attractiveness
  • 4.6.2 Long-term prospects
  • 4.6.3 Openness to new suppliers
  • 4.6.4 More or less business
  • 4.6.5 Business in three years time

5. SWOT ANALYSIS OF SUPPLYING AUDI

6. MANUFACTURING FOOTPRINT

7. FORWARD MODEL PROGRAM

8. MAJOR SUPPLIERS BY COMPONENT SECTOR

• 8.1 Chassis/Underbody
• 8.2 Electrical/Electronic
• 8.3 Exterior
• 8.4 Interior
• 8.5 Powertrain

Table of Figures

• 1 - Global sales of premium car makers
• 2 - Sales volumes in China for Premium car makers
• 3 - Audi' s German Plants
• 4 - Audi' s CKD Assembly line in Aurangabad, India
• 5 - Modular Matrix - MQB and MLB
• 6 - Development from multi-platform strategy to one modular matrix
• 7 - Breakdown of the consolidated cost of materials by Group Company in 2008
• 8 - Volkswagen Group Purchasing Organisation
• 9 - Audi TT Roadster Aluminium Space Frame
• 10 - OEM-Supplier relations survey - Time-consuming negotiations with OEMs
• 11 - OEM-Supplier relations survey - OEMs' reliability in keeping agreements on price
• 12 - OEM-Supplier relations survey - OEMs' willingness to reward cost-saving ideas change
• 13 - OEM-Supplier relations survey - OEMs demands to achieve high quality change
• 14 - OEM-Supplier relations survey - OEMs' demands for testing and validation
• 15 - OEM-Supplier relations survey - OEMs' demands for best product technology
• 16 - OEM-Supplier relations survey - Opportunity to make acceptable ROI from OEMs
• 17 - OEM-Supplier relations survey - OEMs' quality and stability of volume planning
• 18 - OEM-Supplier relations survey - Required redesign during development for selected OEMs
• 19 - OEM-Supplier relations survey - Level of protection for intellectual property from selected OEMs
• 20 - OEM-Supplier relations survey - OEMs' long-term prospects rating
• 21 - OEM-Supplier relations survey - Willingness to do more or less business with selected OEMs