Automotive sector
The automotive industry is experiencing three major disruptions—electrification, autonomous driving, and new ownership models (the “Big 3”)—that are compelling original equipment manufacturers (OEMs) and automotive suppliers to rethink their strategies and product portfolios. Yet, a critical factor often overlooked in navigating these shifts is procurement. To ensure a successful transition, automotive procurement must evolve, adapting to support innovation, manage risks, and optimize costs across increasingly complex supply chains.
The key survival skill in automotive is a new approach to procurement
Manage traditional and future product portfolios
As the automotive industry transitions toward electric, autonomous, and software-defined vehicles (SDVs) , procurement must remain agile to support both legacy products and emerging technologies. Developing a flexible operating model and fostering adaptive supplier relationships enable procurement to maximize value and profit opportunities across diverse product lines.
Build supply chain resilience amidst market volatility
Global disruptions and geopolitical tensions, have highlighted the need for robust supply chain resilience. Implementing comprehensive risk management practices, exploring nearshoring options, and securing sustainable raw material supplies allow automotive companies to build more reliable and adaptable supply chains, ensuring continuity in volatile markets.
Drive cost optimization and sustainability in new technologies
The shift to electrification and digital transformation introduces new cost pressures and sustainability demands. Automotive companies can address these challenges by balancing technical innovation with sustainable sourcing and cost management, optimizing spending on batteries, lightweight materials, and software components while meeting environmental goals.
Blueprint: Unveiling the future of automotive procurement
As the automotive industry faces the triple challenge of electrification, autonomous driving, and innovative mobility models, the role of procurement has never been more critical. Our white paper unveils the pivotal role that procurement plays in steering automotive companies – OEMs and n-tier suppliers – through this transformative era. It introduces a groundbreaking Strategic Procurement Model meticulously designed for industry professionals. A turnkey solution to revamp and supercharge automotive procurement functions.
The need of a new automotive strategic procurement model
OEMs must abandon the idea that, even though many of the components and systems they use have changed the way their organisation operates can remain the same.
To reflect the new market realities and create a stronger engagement with suppliers, the automotive industry needs a new strategic procurement model. At its core is the idea that industry players must adopt a more flexible approach to procurement that does not depend for its success on their established market power. To guide the approach as companies transition to EV procurement and help them to decide the best way to address different procurement needs and suppliers, INVERTO has developed a Strategic Procurement Model. At its core are 6 categories: xEV, Components, ADAS/AV, Software & Applications, Extinction, Service & After Sales. A strategy matrix comprising six dimensions (sets of tools and actions) can be applied to optimize the procurement approach for each of these six categories.
Our experts in the automotive sector
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Our automotive insights
