ENTREPRENEURIAL SUCCESS WITH AUTOMOTIVE OEM's

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ENTREPRENEURIAL SUCCESS WITH AUTOMOTIVE OEM's

• Presented to
• New Enterprise Forum / Ann Arbor IT Zone
• September 21, 2006
• by
• Donald Cassidy

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OEMs Want Your Innovations

• the creativity of our suppliers... is key to the
  future of Mercedes Benz... because their ideas
  for innovations technological and processes
  are very valuable to us.
• For starters, all of our purchasing decisions are
  based on four value drivers quality, technology,
  logistics (supply) as well as cost.
• ...according to Frank Deiss, Vice-President and
  Head of Material Purchasing at Mercedes Car
  Group. - March 2006 issue of Automotive Industries

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What Do OEMs Want ?

• Meet New Regulations
• Quality, Reliability, Durability
• Cost Reductions
• Faster Time to Market
• New Features

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What Do OEMs Want ?

• Profitability
• There isn't a lack of innovation...
• there is a lack of innovation that is
  profitable.

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Protect Your I/P

• Ensure your patent coverage / non-infringement
• May have to plan on variants of your initial
  technology to provide to other OEMs - ensure
  coverage
• Non-Disclosure Agreement ?
• Hard to get
• Instead, tell them what it does... not how
• No slides with PROPRIETARY or CONFIDENTIAL

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What you Need to Know

• The OEM's brands and where your product fits best
• How FMVSS regulations will impact your product
• How your product integrates into their vehicle or
  mfrg process

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Know Your Competition

• To get the , you are competing for
• Time / Attention
• Space in vehicle, or mfrg / assembly line
• Function
• Competing against
• Existing relationships/ agreements
• Other technologies

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Deal Directly with OEM or With Supplier ?
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Deal Directly with OEM?

• Pro
• Get OEM support Directed Buy role with
  designated Tier 1(s)
• Access to vehicle info / marketing
• Help finding Tier 1-2 to work with
• Con
• Could limit your market
• OEM may shop the concept / feature

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Deal with Tier 1 / 2 Supplier ?

• Pro
• Available to all Auto companies
• Integration Manufacturing help
• Con
• Lack direct OEM information
• Supplier approval status puts you at risk
• Their financial condition could limit success
• Supplier may suppress if product overlaps
• Payments tied exclusively to quantity sold not
  in your best interest

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Making Contact

• Network
• Find the right contacts
• Core Discipline team
• Vehicle Engineering team
• Marketing team
• Don't forget Purchasing
• Takes a lot of work / time an experienced sales
  rep is invaluable

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Impact On Vehicle / Business

• Disruptive Technology
• Does your technology require changes to
• Vehicle Architecture
• Testing Validation
• Manufacturing Process
• Marketing
• Customer Usage/Education
• Greater impact but difficult to sell

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Impact On Vehicle / Business

• Continuous Improvement Technology
• Easier to sell
• Fewer differences less chance of problems

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Read Purchasing Agreements!

• Concerns range from...
• logistics and delivery schedules, to
• technology ownership.
• Read all of the fine print!

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Summary

• Opportunities to supply automotive OEMs exist
• Ensure your IP
• Know the competition
• Seek partners when necessary to offer a complete
  solution

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Summary (cont'd)

• Know automobiles / model cycles
• Understand Testing Validation
• Know how to integrate your product into theirs
• Know your limits and how fast you can grow
• Ensure a contract you can live with