This report is kindly sponsored by Tawin Holdings Limited.

Introduction: Why Procurement, Why Now 

For much of the automotive industry’s recent history, logistics has taken the headlines. Just-in-time supply chains, factory shutdowns, container crises, semiconductor shortages — these are, at their most visible, logistics stories. But behind every logistics decision sits a procurement decision. And it is in procurement that some of the industry’s most important — and least talked about — changes are now happening. 

This report does not claim to be a statistical survey. It is a collection of honest views from people who have worked at the highest levels of automotive procurement, people who have left the industry and now see it from the outside, and people who have spent their careers on the supplier side trying to understand how procurement decisions are made. 

The picture that comes through is of a function under real pressure from several directions at the same time. Tariff changes, supplier financial problems, new technology including AI, the shift to electric vehicles, changing power between car makers and their suppliers, and a growing gap between following the right process and getting the right outcome — these are all happening together. How procurement teams respond will shape not just their own organisations, but the entire supply chains they manage. 

The report covers seven main themes, each drawn from what people told us. It ends with a set of questions the industry should be asking itself. 

1. The Procurement Power Question 

Ask senior supply chain executives where procurement sits in their organisation and you will get very different answers. The honest answer is: it depends entirely on the person and the structure they work within. 

In some organisations, the procurement or purchasing leader is a real decision-maker — someone with the power to understand the full commercial picture, give ground in a negotiation in real time, and make judgements that go beyond the numbers. They can sit across the table from a supplier and close a deal on the spot. These people are rare, and those who have worked with them say the difference is huge. 

“He can make a decision at the table and say — it’s done. I give you a reduction there, I get something there. Nobody is close to that.” 
— Senior industry executive 

But this is the exception. Across most of the industry, procurement has become a function focused on following the right process rather than getting the right commercial outcome. The measure of success is whether the process was followed correctly — not whether the result was the best one. 

This matters because the best procurement leaders see their role as much broader than negotiating and managing contracts. The most effective are those who act as connectors — linking what suppliers can offer with what the business actually needs, speaking up for suppliers when they are not in the room, and making sure that commercial relationships are built on real mutual benefit rather than just leverage. 

“The power you have in procurement is just on loan. It comes from your position and your budget responsibility. If you are not reliable — if you don’t do what you say — people will find ways around you.” 
— Senior procurement executive, ex-OEM 

The difference between procurement and purchasing — which many experienced practitioners draw carefully — is worth noting here. Purchasing, in its simplest form, is about execution: negotiating rates, issuing purchase orders, managing the mechanics of a transaction. Procurement, when done properly, is strategic: it shapes how an organisation finds and works with suppliers, builds relationships, and creates value across a supply chain. In many automotive organisations, the two words are used to mean the same thing — and that confusion itself says something about how the function is seen. 

2. When the Process Replaces the Judgment 

One of the biggest structural changes in automotive procurement over the past decade has been the move to automated sourcing systems — most commonly Dutch auction platforms — at several major car makers. The idea makes sense on paper: remove human bias, create a transparent and fair process, ensure compliance. In practice, the results are more complicated. 

Under these systems, once a supplier has passed the technical and operational checks — a process that requires sign-off from operations, logistics and purchasing — the commercial result is decided by an algorithm. Rounds of bidding continue until a winner emerges. In many cases, procurement staff are there in name only. 

“Purchasing is sitting in the room. They put a piece of paper on the table and say you can sign or not. There are rounds — back and forth. But you are never in a real commercial conversation. That is completely gone.” 
— Senior logistics executive 

There are people who defend this approach. Getting sign-off from operations, logistics and purchasing together does at least mean that the worst outcomes — giving business to a supplier who cannot actually do the job — are supposed to be stopped at the qualification stage. But even this does not always work. Whether a supplier can really perform in the real world is not always visible at the qualification stage. And when things go wrong, the procurement team that ran the process is rarely the one left managing the consequences. 

“They called us last year twice because the supplier couldn’t operate the business anymore. And now they’ve awarded the same business to the same people again.” 
— Senior industry executive 

What is most difficult to defend is what these systems do to the skills inside the organisation. When procurement is reduced to managing a process, people stop learning how to negotiate commercially. The ability to understand a supplier, structure a deal, and find where value can be created or saved — these skills are not kept alive if they are never used. The organisation becomes dependent on the system and loses the ability to question whether it is working. 

“You come up with good business cases to outsource stuff — and then you forget how to buy it. There is a pendulum there, and most companies don’t notice when they’ve swung too far.” 
— Cross-industry supply chain executive 

This is not an argument against having clear, well-run processes. Transparent sourcing matters — especially at scale. But there is a real difference between a process that supports commercial judgment and one that replaces it. The best procurement organisations understand that. Many do not. 

3. The Changing Balance Between Car Makers and Suppliers 

For most of the past thirty years, car makers held the power in their relationships with suppliers. They had the volume, set the terms, and — particularly in logistics — treated their supply base as an extension of their own operations rather than as independent partners. The relationship was designed to be transactional, and suppliers largely accepted it. 

That is changing. Supplier margins have, for the first time since 2019, gone above OEM margins in several parts of the industry. Years of outsourcing — manufacturing, IT, logistics operations — have in some cases left car makers less able to judge what they are buying than the suppliers they are negotiating with. And as vehicles have become more technology-driven, car makers have found themselves sourcing from suppliers — in chips, software, battery technology — who do not need the automotive relationship and can choose their customers. 

“We used to teach new technology suppliers how to supply the automotive industry. Now we need to learn how to purchase from them.” 
— Industry observer 

This has real implications for procurement. Negotiating from a position of power — the model that defined automotive purchasing for a generation — is becoming less effective precisely where it matters most. A semiconductor supplier that also serves Apple and Samsung is not going to worry too much about losing one car maker’s business. A logistics provider that can choose between customers during tight capacity periods will remember which ones treated them well. 

“If suppliers always feel they’re getting ripped off, the next time you go out to market, they won’t be interested. The market has changed. Suppliers can now choose who to work with.” 
— Senior procurement executive, ex-OEM 

The most forward-thinking procurement leaders have recognised this shift and changed how they work. They invest in being a good customer — in building relationships that make suppliers want to give them priority, share information early, and bring new ideas without being asked. This requires a very different approach from traditional automotive procurement, and it requires people who can work with suppliers as partners, not just as counterparts in a negotiation. 

WHAT PRACTITIONERS SAY 

• “More consolidation of logistics business within big providers — reducing the options for buyers.” — Tier 1 procurement executive 
• “Supplier insolvencies, cost-down pressure, and quality concerns driven by global supply disruptions.” — OEM Tier 1 supplier 
• “Cost pressure versus supply-base survival. Procurement is being forced into a defensive, firefighting role.” — Senior industry analyst 

4. The Tender Process Problem — and the Case for a Better Approach 

One of the most consistent complaints from logistics service providers — and one that the more honest procurement leaders acknowledge — is that the standard tender process makes it very hard for suppliers to bring new ideas to the table. When a tender document runs to sixty pages of tightly defined specifications, the message it sends is clear: tell us you can do exactly what we have already decided we want. The result is a process that rewards the ability to match a specification rather than the ability to solve a problem. 

This is not always wrong. For straightforward services with well-understood requirements and stable volumes, a tight, well-defined tender process is efficient and fair. The problem is that very little in automotive logistics fits that description today. Volumes change. Origins and destinations shift. Trade rules change. What looks like a stable requirement when the tender goes out can look very different eighteen months into a contract. 

“If you have a very closed tender with very defined specifications, that is absolutely normal when you buy a product that needs to perform in the same way for many years. But in our world of supply chain, everything changes. We need to be open-ended.” 
— Global head of procurement, major OEM 

The better approach — which some leading procurement teams are already using — is to design tenders that ask a different question of suppliers: not ‘can you do what we have specified?’ but ‘how would you solve this problem?’ This creates space for suppliers to bring their own knowledge of what works, their technology, and their understanding of the market. It produces better outcomes. And it builds the kind of relationship where a supplier will come to you early when something is going wrong — rather than staying quiet and hoping you won’t notice. 

“Tenders and RFQs should be the end of a process that started much earlier — where you are in regular contact, you understand what the supplier is working on, and you have already learned from other industries. The formal process should confirm a relationship, not start one.” 
— Global head of procurement, major OEM 

From the supplier side, the practical message is clear: a tender process is not the right moment to present an innovation unless it directly saves cost. The right approach is to bid competitively on what has been asked, secure the relationship, and then build the case for additional value once you are working together. Getting onto the tender list in the first place is often the hardest step — and it requires patience, a clear value proposition, and a real understanding of how the buying cycle works. 

“Ask your client about their planning cycle — when are they going to go out for tender, so you know when to follow up. The curve starts slowly. But if you are really performing, you can get a lot of business.” 
— Senior procurement consultant, ex-OEM 

On the question of who to build the relationship with — the head of supply chain, the head of logistics, or the procurement buyer — the answer depends on the organisation. In companies where procurement is genuinely strategic, the buyer is the most important relationship; they have good reasons to keep their tender lists competitive and the ability to support you internally. In organisations where purchasing is mainly an execution function, the real decision-maker sits in supply chain or operations, and that is where the relationship needs to be. 

5. Tariffs, Trade Changes and the Flexibility Gap 

The tariff situation of 2024-25 has tested automotive procurement in ways that normal trading conditions do not. As trade policy has shifted — new export controls, revised product classifications, threatened and actual tariffs on goods from Mexico, Canada and China — the gap between how automotive procurement works and how it needs to work has become very clear. 

The core problem is structural. A car maker cannot move a production line because a tariff changes. The factory is where it is. The tooling costs have already been paid. The supplier contracts were often signed before the current trade situation even existed. This is not carelessness — it is simply the nature of large-scale manufacturing. But it does mean that automotive procurement is operating in a world it was not designed for. 

The contrast with other industries is instructive. In consumer goods and fashion, where sourcing volumes can be moved between countries relatively quickly, companies have shown a real ability to respond to tariff changes — not without pain, but at a speed that automotive cannot match. 

“In fashion, there is room to move how you allocate sourcing volumes. Different countries are taxed in different ways and you can shift. In automotive, you have a factory in a country. You are much more fixed. You are not flexible.” 
— VP Global Logistics, major consumer brand 

For automotive procurement, the practical lesson is not that factories should be easier to relocate — they cannot be. It is that the data around sourcing decisions needs to be good enough to model the impact of a change quickly. Which product classifications apply to which supplier flows? What is the total cost impact of a 25% tariff on components from a given country? How quickly can procurement work out the alternatives? 

“New export controls on 30 product categories out of Mexico. How quickly can your company work that out? If you have the data accessible, it takes five minutes. If you don’t, you are scrambling.” 
— Cross-industry supply chain executive 

Companies that have invested in keeping their trade data in good order — product classifications, commercial invoices, country-of-origin records — have a real advantage in this environment. Those that have not are effectively working without the information they need when trade policy changes, which is now happening more often and less predictably than before. 

The deeper lesson from the tariff situation is about the link between sourcing strategy and commercial outcomes. Automotive procurement has historically been set up to find the lowest cost within a stable trade environment. The environment is no longer stable. The function needs to build a different kind of capability — not just finding the cheapest source, but managing risk, modelling different scenarios, and building flexibility into the supply base where possible. 

WHAT PRACTITIONERS SAY 

• “Constantly shifting tariffs and trade agreements, forced re-sourcing and supply base changes mid-programme.” — Senior purchasing executive, major OEM 
• “Minimum order quantities, longer lead times, country protectionism and China subsidies.” — Procurement director, Tier 1 supplier 
• “The political pressure to exit China versus the operational impossibility of doing so. Managing exposure rather than pretending to eliminate it.” — Senior industry analyst 

6. Data, Technology and the Information Gap 

There is wide agreement across the industry that AI will change procurement — in how tenders are run, how suppliers are evaluated, how risks are spotted, and how decisions are made. There is less agreement, and less honesty, about how far most organisations are from being ready to benefit from it. 

The limiting factor is not the technology. The tools exist and are improving quickly. The limiting factor is data — specifically, whether the data that procurement decisions are based on is complete, well-organised and easy to access. Commercial invoices that are not in digital form. Trade data that is held separately across different parts of the business. Cost information that exists at a high level but not at the level of individual transactions. Product classification records that live in a system nobody can query quickly. These are not unusual problems. They are the normal situation in most large automotive organisations. 

“To use AI well, you need to move from data to information to action. AI is a powerful tool — but only if the data foundation is there. If the data is not strong, you do not get the right information. And if you do not get the right information, you cannot make the right decision.” 
— Global head of procurement, major OEM 

The organisations making real progress have treated data as something strategically important, not just a by-product of operations. Bringing freight procurement together across business units. Building their own tools to check freight invoices. Connecting trade data with logistics data. Making it possible for the people making decisions to access the data they need directly, rather than waiting for a specialist team to produce a report. 

“We built our own freight audit software because I needed the data — 15,000 freight accounts, three parcel companies across the entire world. We were paying pre-COVID prices with no adjustment for inflation. That saving was just sitting there, untouched.” 
— Cross-industry supply chain executive 

The AI opportunity, properly understood, is not about replacing procurement judgment. It is about getting from data to insight faster — so that the person making the decision can spend their time on the decision, not on gathering the information. The organisations that will benefit most are those where the data is already in good shape. For those that have not yet done this work, the gap is growing. 

“AI will be used more and more for tendering, making procurement processes faster. But you need to be much more flexible — and for that you cannot keep working with old, fixed approaches.” 
— Head of logistics purchasing, major OEM 

There is another dimension worth noting: who inside procurement has access to data. In many large organisations, the ability to look at data is restricted to specialist IT or analytics teams — which means procurement people have to wait for information that should be directly available to them. The companies moving fastest are those that have given the people making decisions direct access to the data they need. 

7. Moving From Lowest Cost to Most Reliable 

For most of the past thirty years, the main measure of success in automotive procurement was cost reduction. The job was to pay less for a given input — whether components, logistics services, or other spend — year after year. The assumption behind this was that supply chains were basically stable, that disruptions were rare, and that the main risk was paying too much rather than not getting what you needed at all. 

That assumption no longer holds. The period since 2015 has produced a series of supply chain shocks — geopolitical events, the pandemic, trade policy changes, natural disasters — that have shown how fragile supply chains built purely around cost can be. The question is no longer only ‘how cheaply can we source this?’ but ‘how reliably can we source this, and what happens when we cannot?’ 

“The shift from lowest cost to reliability and speed of response. Dual sourcing, regional backup, having options. Procurement measured on risk management, not just savings.” 
— Senior purchasing executive, major OEM 

In practice, this means organisations are reconsidering things that were previously ruled out on cost grounds. Using more than one supplier for the same service. Building regional backup into the supply chain design. Reconsidering long-term contracts — which had been getting shorter as car makers tried to keep flexibility — as a way to secure priority treatment from key suppliers. 

The tension between reducing costs in the short term and investing in reliability for the long term is real and not yet resolved. Procurement teams are being asked to do both at the same time — objectives that frequently conflict. The organisations handling this best are those where procurement has enough seniority and cross-functional authority to make the case for reliability investment at board level, rather than being managed purely against a cost-saving target. 

“If you are not sure whether to raise something with the board — ask yourself: if I don’t raise this, could something really bad happen? If the answer is yes, pick up the phone. And come with a proposal, not just a problem.” 
— Senior procurement executive, ex-OEM 

Sustainability sits within this picture — and its position is complicated. At board level, the commitment is genuine and the pressure from regulation is real, particularly in Europe. Further down the organisation, the practical reality is that sustainability requirements compete with cost targets that have not been relaxed to make room for them. The result is often a gap between what organisations say they will do and what actually happens — made worse by the fact that there is no single agreed definition of what sustainability in supply chain actually means. 

“As humans we need to survive the short term to get to the long term. For many in procurement, sustainability is still a long-term goal while short-term profitability is the immediate pressure. I don’t think many people want to admit that — but it is true.” 
— Senior procurement consultant, ex-OEM 

WHAT PRACTITIONERS SAY 

• “EV demand below forecasts. ICE, hybrid and EV portfolios running in parallel. Re-activating supplier relationships that were being wound down.” — Senior purchasing executive 
• “Sustainability requirements are getting bigger. It’s not just about the car — trucks, everything should be more sustainable. And AI will be central to handling the new flexibility requirements.” — Head of logistics purchasing, major OEM 
• “Develop our people and our partnerships. This is the foundation for everything else. It is primarily a people challenge, not a technical one.” — Senior procurement executive, major OEM 

8. What Other Industries See When They Look at Automotive 

Some of the sharpest observations about automotive procurement come not from those inside it, but from those who have left it — executives who spent years working inside the industry and have since moved into consumer goods, industrial manufacturing, or advisory roles, and now see the automotive way of doing things from the outside. 

The themes that come up consistently are the same: a function that is strong on process discipline but limited in commercial thinking; that works in separate teams even when the problems it faces require working across functions; and that tends to protect its processes rather than ask whether those processes are producing the right results. 

“In automotive there is a real pride in manufacturing capability — but then we forget that we actually want to sell something. You cannot work in your own silo. You always need to think one step ahead.” 
— VP Global Logistics, ex-automotive, now consumer goods 

The difference in commercial culture is striking to people who have experienced both. In consumer goods, the willingness to go beyond a budget when a market opportunity appears — to put money where it is needed rather than where it was planned — is a normal way of working. In automotive, the instinct is to defend the plan. 

“If we see we can generate higher sales or capture market share, we will go over the budget and put capital where it is needed. I found it much harder in automotive to find that kind of flexibility.” 
— VP Global Logistics, ex-automotive, now consumer goods 

Cross-industry movement in procurement and supply chain is still relatively uncommon in automotive — less common than in logistics, where some executives have made the move successfully. Those who have moved say consistently that their automotive discipline — lean thinking, risk management, resilience planning, data rigour — is highly valued in other sectors. The reverse — bringing commercial flexibility and a stronger focus on the end customer from other industries into automotive procurement — happens less often, and is arguably more needed. 

“If the company is open to getting a fresh perspective on how supply chain can be managed, it is a very good fit. But if the company is closed to new ideas and you can see a better way but cannot make it happen — that is where people get frustrated.” 
— VP Global Logistics, ex-automotive, now consumer goods 

9. People, Skills and Getting the Right Team 

Changing automotive procurement — from a cost-reduction function to a genuinely strategic capability — requires people with a different set of skills from those the function has traditionally recruited and developed. The skills that matter most now sit at the intersection of commercial judgment, the ability to work with data, the ability to influence people across different functions, and the ability to adapt quickly. These are not the skills that a standard automotive procurement career path has traditionally built. 

“We limit ourselves too much. We look for a specific number of years of experience in a very specific area. I think we could not be more wrong about that.” 
— Cross-industry supply chain executive 

The most effective procurement professionals described in this research share several characteristics. They are genuinely interested in how their suppliers’ businesses work — what a logistics provider actually does, what limits them, and what they know that the buying organisation does not. They are comfortable making decisions without having all the information. They understand how data moves through the systems they work with — not as a software developer, but well enough to know what data is available, where it is, and how it can be used. And they can get things done through people who do not report to them and may not naturally want to work with them. 

“Procurement puts you in contact with everything — finance, logistics, supply chain, sales. How do you influence people without having any authority over them? That is also a sales skill. And once you learn it, nothing scares you anymore.” 
— Senior procurement executive, ex-OEM 

The talent question also covers how organisations develop and keep good procurement people. The function tends to be invisible when it is working well — which makes it hard to make the case for investment in people and capability at board level. The organisations that have built strong procurement functions are those where leadership has recognised that procurement capability is not a back-office concern but a real competitive advantage. 

“Procurement leaders are increasingly coming from supply chain roles. A broader understanding of operations, manufacturing and logistics is becoming necessary. Procurement needs to be seen as critical infrastructure — not a back-office function.” 
— Senior purchasing executive, major OEM 

For people starting out in the field, the message is a positive one: procurement offers real breadth of exposure, significant responsibility early in a career, and skills that transfer across industries and functions. The challenge — and the opportunity — is that the function is changing faster than most organisations’ development programmes have kept up with. 

Conclusion: Questions the Industry Should Be Asking 

The evidence in this report points to a function under significant pressure from several directions at once. Tariff changes, supplier financial difficulties, new technology, the energy transition, shifting power between car makers and suppliers, and a growing gap between following the right process and getting the right outcome — these are all happening at the same time, and they affect each other. 

The organisations that will handle this well are not necessarily those with the most advanced technology or the largest procurement teams. They are those with the clearest sense of what procurement is actually for — and the honesty and courage to close the gap between what their processes produce and what their supply chains need. 

The following questions are offered as a starting point for honest internal discussion: 

On commercial capability: 

• Do our procurement processes produce good commercial outcomes — or just compliant ones? 
• Can our procurement leaders negotiate effectively — or have we designed that capability out of the process? 
• Do we know which of our key suppliers would choose to work with us if they had a genuine choice? 

On data and technology: 

• If a major tariff change happened today, how quickly could we model the impact on our supplier flows? 
• Is our procurement data organised well enough to benefit from AI — or would we be building on weak foundations? 

On resilience and strategy: 

• Are we measuring procurement on the right things — or optimising for a world that no longer exists? 
• Do our procurement people have enough seniority and cross-functional authority to raise issues at the level where they can be addressed? 
• Are we a preferred customer — or do we assume our volume is enough? 

 These are not comfortable questions. But they are the right ones. The cost of not asking them is already visible in the gap between what automotive procurement says it does and what it actually produces. Closing that gap is the work of the next few years — and it starts with honesty about where the function is today. 

— LConnect, 2026