Today, the #Automotive Sector passed the threshold of 80 million vehicles per year. OEMs are making huge turnovers and famous brands are trying to get new positions and market shares in the highly difficult new world structure. Many of them got together to make new alliances or M&As. The guru of the gurus and the founder of modern management Peter Drucker has called the automotive industry as "the industry of industries". Together with the defense sector, most of the technical improvements and innovations have been done for the automotive sector.

Ömer Hantal
Funds & Strategy Manager at Farplas

However, this super large sector cannot survive without suppliers. For every passenger car, there are approximately over 30.000 parts and the total turnover of the whole #AutomotiveSupplySector is already over 600 billion USD. Of course, this huge cake is attractive for many companies and capital owners. On this very tempting point, it is a must to understand what the right subject to target is. That's why Marketing becomes a major operational need for these companies.

#Marketing? On the one hand, as an automotive supplying company, it is not logical to wait for a Business to Consumer - #B2C based brand communication activities. On the other hand, this does not mean that the business-to-business – #B2B companies from the automotive supply sector cannot survive or grow properly without any #BrandCommunication activities. As mentioned in many marketing classes, this is an important part and tool of brand management by which the companies inform, persuade, enlighten, teach, remind, and enrich the knowledge of their stakeholders about the brand, its strengths, values, fundamentals, and its offerings of products and services. You have to deal and write down how you reach, touch, and get these #RFQ s from new customers and new types of spare parts via this methodology or what the target companies can be for your new achievements and investments.

Let's say you want to make business with AUDI and become its supplier. You asked for a VW Audit, they came, you are approved and you started to export parts... But then, what can be the future opportunities? Have you ever thought about it? What are the plans of your new customer? I realized that many of the Turkish Supplying companies are not spending any time or effort to check their customers and their possible customer’s investor relations presentations... Too pity!!!

Here is the #AUDI 's latest version: 129. Ordentliche Hauptversammlung der AUDI AG

Is it the only one? Well nope! Here is the Groupe Renault's Mid-Term Plan 2017-2022 or Details from Toyota's Strategical Planning. The examples can be dramatically augmented. In this interesting point, it is not about the numbers of examples of data sources, but it is how you process the data as the Marketing Department. You have to understand the plans of your target customers, investigate the trends of the sector before they would become fashionable among suppliers, and estimate the needs of the market. Thus, together with your R&D department, you can also revise your company's product portfolio and dig deeply insides of the people in your habitat for the new ideas related to your portfolio. To reach that level of understanding and that power of persuasion on your superiors, as marketing department, the most creative and fruitful tools are the Product Life Cycles based on RFQs/Nominated Projects' Quotation Values and the Marketing Research Analyses. By speaking with the strength of the numbers, it will be a good basis for your arguments and also good documentation even if they will be rejected for the moment.

Another important task of the Marketing will be also the top contribution for companies' long term strategic plans. Many companies on the local supplier level are forgetting to heat their objectives via the target customers' future projects. If you aim to enter into a new product segmentation in the upcoming project, you cannot wait until the OEM purchase department starts to distribute RFQs. Probably by then, it would be too late. As the Marketing department, you have to start to sow the seeds during the previous project nomination phase or get in touch with the right people in your customer before they launch the technical specifications to their purchase department. Unfortunately, most of the mid-size local footprinted supplier companies see these efforts as another cost resource. Thus, like not investing in time for a proper stamping or injection machine, they do not invest in time for the organic growth in the turnovers. For these supplier companies, they are happy to get RFQs from #OEM companies. However, what they do not foresee or in better words, what they refuse to accept that this draw from the client-side would not last forever. There will be new competitors who might realize the job as satisfactory as we realize but with a cheaper price. This would be exactly the point where you cannot keep the sustainability.

To be sure where you sow those seeds which are not unlimited on your company’s resources, it is another must to define your target countries:

  • Where you want to sell your products?
  • Which OEMs/Tier 1s are your targets and why?
  • How you will define your target country’s admission or holding on criteria?
  • What part of your product portfolio can attract customers in this market?
  • Which obstacles are avoiding you to become a major seller in the market?
  • How you are planning to overcome cultural differences between your company’s home business reflexes and the clients’ business reflexes in this target country?

It is quite important that when we define the target country, we do not define in which country we are going to build our next plant. It is important that first, we define where we aim to sell our products, then in our 4P analyses, we can define building a new plant as one of the new target country's admission criteria. Then, market analyses such as demographic changes, custom regimes, competitor presences have to be defined and to be documented properly. This workload has to be supported also via brand positioning graphics.

The last but not least of these processes, all the work done so far on the Marketing department staff has to be related with SMART objectives on specific, measurable, achievable, realistic, and time-based target values while all marketing activities have to be related also with specific budget-related targets.