With sales in the automotive industry in 2013 at its lowest level since records began in 1990, according to industry association ACEA, there seems to be much more focus on pricing, not only at "finished good" level, but also on the aftermarket playing field. How is your company doing? Discover it here!

1. European Pricing Maturity
2013
Results and key findings - Automotive Industry

2. Results and key findings - Automotive Industry
Automotive industry – observations
Price optimisation
strategy is essential
With sales in the automotive industry in 2013 at its lowest level since
records began in 1990, according to industry association ACEA,
there seems to be much more focus on pricing, not only at “finished
good” level, but also on the aftermarket playing field.
77% have between 8-15 or more people responsible for pricing on a
daily basis at worldwide level.
32% of respondents have more than 5 years of experience in
pricing, but the biggest portion, 45%, have between 3-5 years of
experience.
The majority, 81%, agree that a specific price optimisation strategy
cannot be missed in their companies and these same respondents
are also convinced of the important role played by big data analytics.
As if to strengthen this point, their maturity scores show that price
monitoring and reporting emerges as one of the key areas on which
they would like to focus during the coming 12 months.
Figure 1: Distribution of respondents within the Automotive industry
Perception
Reality
Ambition
18,18%
45,45%
0%
22,73%
45,45%
36,36%
59,09%
9,09%
63,64%
0%
0%
14,29%
Level 1: Price list
maintenance
Level 2: Transactional
control
Level 3: Full value
capturing
Level 4: Full profit
optimisation
Source : EPP European Pricing Maturity Study – 2013
Figure 2: Distribution of respondents within the Automotive industry
perception
reality
ambition
64%
59%
Perceived pricing maturity
2,41 = LEVEL 2
Level 4:
Profit Optimisation
9%
Actual pricing maturity
2,18 = LEVEL 2
Ambition within 12 months
3,17 = LEVEL 3
14%
0% 0%
45%
Level 3:
Full Value Capturing
36%
23%
45%
Level 2:
Gain transactional control
and optimize
18%
0%
Level 1:
Price List Maintenance
You sell the right products
to the right cutomers at the
right prices
C
H
A
S
M
You develop end-user
solutions with different
revenue models
You sell segmented
solutions at value based
prices
You try to sell anything to
anyone at all prices
Source : EPP European Pricing Maturity Study – 2013
Page 2 of 4

3. Results and key findings - Automotive Industry
Automotive industry – gap analysis
Organisation &
Governance
Price execution
Monitoring
Move to a situation where permission to overrule prices in the system
is very limited, and controlled/monitored by price management
team. Ideally, overrule authorisations should be reserved only for
strategic pricing decisions at director level.
Provide sales force with value argumentations per product(line),
across each segment and decision making unit. Implement full and
regular win/loss analysis and use it as input for new solution
development. Ensure alignment throughout Sales, Marketing and
Product Management by means of training on value pricing and value
selling. Pay attention to ensure that discount structure does not
trigger channel conflicts or grey markets. Eliminate unconditional
discounts, replace by performance based incentives/discounts.
A better view on competitor intelligence would bring the Automotive
industry a step ahead according to respondents. Information should
be systematically gathered, monitored and translated into corrective
actions or changes in pricing policy where necessary. Translate this
info into a competitor attack plan. Monitor the results of any price
promotions, share it with sales and marketing and develop new
promotions based on the insights gained.
Figure 3: Gap analysis: Automotive industry
Actual PMI score
Gap with Ambition
Tendering
0.71
Governance & Org.
System & Tools
0.94
1.25
Monitoring
Price Execution
1.11
1.23
Discount Strategy
Price Policy Setting
1.08
Price Strategy
0.99
0.95
0.00
1.00
2.00
3.00
4.00
Source : EPP European Pricing Maturity Study – 2013
Figure 4: Distribution of maturity scores across components of
the pricing framework
Reality
Ambition
Price Strategy
2,18
3,17
Price Policy & Setting
2,45
3,41
Discounting strategy
2,03
3,11
Price Execution
2,00
3,23
Monitoring
1,97
3,08
System & Tools
2,23
3,17
Governance & Org.
2,09
3,34
Tendering
2,35
3,07
Source : EPP European Pricing Maturity Study – 2013
Page 3 of 4

4. Results and key findings - Automotive Industry
Automotive industry – Tendering
60% of Automotive respondents filled in the tendering section of the
survey. Points for improvement during the next 12 months are:
Improve margin
Life time value review
Move beyond the philosophy of winning the tender first (price to win)
and then looking at opportunities to increase the margin within the
agreed price. Respondents indicate that they want to focus on having a
margin improvement plan per tender in place before actually submitting
the tender.
Build in regular account reviews to check the life time value of the
tender.
If you would like more information or to arrange an informal discussion
on the issues raised in the EPP European Pricing Benchmark
Study and how they affect your organisation, please contact:
Project Manager:
Nicolene Barnard
Nicolene.Barnard@pricingplatform.eu
President & Founder of EPP:
Pol Vanaerde
pva@pricingplatform.eu
Page 4 of 4