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Cooperative Buyer-supplier Relations in Product Development Projects in the Car Industry
paris98/f98i102

Authors

Lydie Laigle - LATTS-ENPC

Abstract

Since the beginning of the 1990s, French car manufacturers have transferred to their first tier suppliers design and development tasks of car sub-systems such as seats, clutches, brake systems. At the same time, they have established project organizations in order to renew rapidly vehicle models, to control design risks and to improve their flexibility. These changes have modified subcontracting relations and partnership between car producers and their first tier suppliers. In the first part, we present the characteristics of the closer and longer-time "co-development" relation which stems from the sharing of design and development tasks between business partners. We stress especially on the uncertainty linked to the unpredictable result of the co-design phase and the dependency coming from the sharing of innovation risks between firms. In the second part, we focus on the difficulties partners have to overcome to establish "co-development" processes. One of the main difficulty is : how firms can conclude engagements at the beginning of co-design process and how they negotiate technical solutions and price adjustments to adapt their products to the competitive and market changes. After having detailed organizational and working practices, contractual patterns, technical instruments used by firms to improve their co-operation, in the third part, we show that the "co-development" partnership is characterized by the trade-off between more cooperative relations and the market pressure which leads partners to adopt individual economic strategies in order to protect their profit, to diversify their customers and reduce their R&D and industrial costs. We conclude that the future and the success of "co-development" relation depend on the way partners will attempt to manage the different aspects of this trade-off and the conditions in which they manage their R&D activities and their trajectories of internationalization.

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