North American automotive suppliers¹ acknowledge that their long-term prospects depend, at least in part, on extending their typically narrow customer base. This goal will force US suppliers to reach out beyond the Big Three—which may ultimately cause foreign suppliers to serve automakers other than the ones they originally followed into the US market. But a survey² shows that most US suppliers wonder if they have the sales and marketing skills to succeed.

In 2003 North American carmakers³ accounted for 75 percent of the business of their North American suppliers, which now, according to our survey, plan to reduce that level to less than 60 percent by 2008 (Exhibit 1). The pressure to diversify the customer base is growing because DaimlerChrysler, Ford Motor, and General Motors continue to move beyond their traditional US suppliers in an effort to cut costs and gain leverage. As non-US suppliers pursue new business with the Big Three, traditional US suppliers are trying to gain new business with foreign automakers now operating in the United States. Although some suppliers have made headway in winning new, nontraditional business, executives at almost half of them don't believe that they will reach their 2008 targets....