In the automotive supply industry, sales play a crucial role in driving profitable growth. The ability to manage key performance indicators (KPIs) allows suppliers to adjust to market conditions, maximize profitability, and outperform competitors. Below are the top 10 KPIs that automotive suppliers should track to ensure sustained success in their sales efforts.
Understanding how your company’s growth rate compares to the overall market is essential. Breaking this down by specific products or customer segments helps in identifying key opportunities for improvement. Automotive suppliers can leverage their strengths by outperforming the market CAGR.
Tracking your share of the market, with specific attention to product lines, regions, or customer groups, is crucial for maintaining a competitive edge. Market share reflects your position against competitors and helps in recognizing shifts in customer demand or competitor strategies that may require a change in approach.
This KPI measures the total volume of new orders received over a given period. A healthy order intake indicates that your sales pipeline is strong and that marketing and sales strategies are effectively converting market demand into revenue.
The strategic hit rate measures how much of the business you’ve won that aligns with your targeted goals. It evaluates the effectiveness of your sales strategy. A lower hit rate suggests the need to realign resources or reconsider your targeting approach.
Change management in the automotive industry is driven by both external and internal changes. External (technical) changes originating from the customer require sales to ensure that price adjustments at least cover the increased costs and thus generate profits. Internal change management is driven by initiatives that optimise processes or reduce material costs in order to increase profitability.
Claims often arise from contract deviations, such as issues related to volumes, materials, energy, or exchange rates. Claim performance tracks how much reimbursement (compensation) your company receives due to these deviations. Monitoring this KPI ensures that your team successfully mitigates the financial impact of non-compliance with agreements.
Claim aging measures how long specific claims remain unresolved. A longer claim resolution period can negatively impact financial health, especially in terms of liquidity and project profitability. This KPI also serves as an escalation indicator for potential issues that could affect ongoing projects.
Under- and overpayments always have their root cause in volume deviations. If underpayments become visible, sales teams must ensure they are resolved promptly with the customer to avoid financial losses. Tracking these discrepancies is essential for stabilizing financial outcomes.
This KPI highlights sales instances without corresponding purchase orders, helping to mitigate financial exposure risks and ensuring that prices align with contractual agreements.
Sales can significantly impact profitability by ensuring that calculations during the Request for Quotation (RfQ) phase are accurate and aligned with the final quotes. Proper risk assessment is key to securing profitable deals. Once business is secured, sales teams must focus on effective change and claim management to ensure that the project remains profitable throughout its lifecycle.
By focusing on these KPIs, sales teams in automotive suppliers significantly contribute to the profitable growth of the business. Digital Automotive integrates all of these KPIs into their platform, with automatic real-time calculations to keep your business on track for profitable growth.
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