Supplier–customer relationships: Weaknesses in south african automotive supply chains

Abstract

The South African automotive industry, which is an important sector in the South African economy, needs to function efficiently if it is to compete internationally. However, South African automotive components manufacturers (ACMs) are not internationally competitive and automotive assemblers, also known as original equipment manufacturers (OEMs), often import cheaper components from abroad. All parties in the South African automotive supply chains need each other to ensure optimal efficiency and competitiveness. Furthermore, it is vital that good relationships exist between customers and suppliers in the automotive supply chains in South Africa. ACMs are central to automotive supply chains. A survey was conducted among ACMs to determine the nature of relationships that exist between buyers and suppliers in South Africa’s automotive supply chains. The results showed that collaborative relationships do indeed exist between members of the supply chain but that communication, understanding of the parties’ situations and cooperation can improve this relationship and so create total alliance between OEMs and ACMs.