Auto giants Toyota, Honda, and General Motors strengthen partnerships with their suppliers.
In the face of changing government policies, electric-vehicle program cancellations, and trade tensions, three major automakers – Toyota, Honda, and General Motors (GM) – have demonstrated resilience and adaptability in their relationships with suppliers, as revealed in Plante Moran's 25th annual North American Automotive OEM-Supplier Working Relations Index (WRI) Study.
Toyota's strategic adaptations played a significant role in their improved supplier relations. By localizing battery production in the U.S., Toyota reduced supply chain risks and aligned with government incentives like the Inflation Reduction Act (IRA). Additionally, the company leveraged trade agreements that lowered U.S. tariffs on Japanese vehicles, and through active lobbying, managed to reduce tariffs by 10%. This strategic approach helped Toyota manage costs and strengthen supplier relations.
Moreover, Toyota's diversified focus on hybrid and hydrogen technologies, which now constitute 40% of U.S. sales, enabled them to balance market demands without overcommitting to electric vehicles, thereby maintaining stable and collaborative supplier relationships despite electric vehicle program shifts.
Honda and GM also showed improvements in their supplier relations as reflected in the 2025 study, though specific operational strategies are less detailed in the available data. The study notes overall improvements despite broader industry challenges, implying effective collaboration and communication with suppliers by these OEMs.
The improvements occurred despite headwinds from government policy changes, including tariffs and EV program cancellations, illustrating adaptability and strategic resilience in managing supplier networks. The top rankings of Toyota, Honda, and GM in supplier relationships reflect their ability to navigate material cost recovery, tooling investments, and program uncertainties better than competitors such as Nissan, Ford, and Stellantis.
The WRI study evaluated relations between the Detroit Three automakers and their three leading Japanese counterparts. Toyota earned 386 points in the 25th annual North American Automotive OEM-Supplier Working Relations Index (WRI), an increase of 18 points from 2024 and its highest score since 2007. Honda rose 3 points to earn 347 in the WRI, its highest score since at least 2015. GM surpassed 300 for the first time, gaining 11 points to earn a 2025 score of 310.
The consultancy notes that the three leading Japanese automakers improved overall relationships despite managing unprecedented market volatility. The ability to help suppliers reduce costs and manage uncertainty separates the top three OEMs from the bottom three. Automakers with higher WRI scores show greater flexibility in their relationships with suppliers, particularly for new products and commodities.
However, not all automakers fared well in the study. Both Nissan and Ford declined in the WRI, with Nissan falling 6 points to 249 and Ford falling 6 points to 191. Stellantis also declined, falling 11 points to 141, remaining in last place.
Plante Moran conducted the WRI study from mid-February to mid-April, receiving responses from 665 executives from 398 Tier 1 suppliers serving the six largest U.S. automakers. The WRI study does not evaluate Genesis, as it focuses on the Detroit Three automakers and their three leading Japanese counterparts.
Dave Andrea, from Plante Moran's Strategy and Automotive & Mobility Consulting Practice, states that contracts need to evolve to fit the new supply base. Angela Johnson, a supplier relations analyst, states that GM is "starting to turn the ship" in terms of supplier relations.
The WRI study underscores the importance of strong relationships between OEMs and suppliers in navigating industry uncertainty with more equitable risk and cost sharing. Suppliers perceive fairness, equity, accountability, and trust through the impact of OEM decisions on their bottom line. As the automotive industry continues to evolve, it is crucial for OEMs to maintain and strengthen these relationships to ensure a stable and resilient supply chain.
[1] Inflation Reduction Act [2] U.S.-Japan Trade Agreement [3] U.S.-Mexico-Canada Agreement [4] Plante Moran's 2025 WRI Study [5] Plante Moran's 2024 WRI Study
- The strategic decision by Toyota to localize battery production in the U.S., aligned with government incentives like the Inflation Reduction Act (IRA), has significantly impacted their supplier relationships, demonstrating the importance of industry-government collaboration in the manufacturing industry.
- The finance sector, particularly the U.S.-Japan Trade Agreement and the U.S.-Mexico-Canada Agreement, play a crucial role in lowering tariffs on products within the automotive industry, such as Japanese vehicles, which in turn helps automakers like Toyota manage costs and maintain stable relationships with suppliers in the transportation sector.
