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Learn to Form Strategic Alliances in the Automotive Industry

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By: Gabriela Jaimes Galindo

Humans live through alliances. When we are young, we form alliances with our parents, then with our study buddies, with our partners, teachers, and finally, with almost anyone in our professional lives. All of this allows us to learn, grow, mature, evolve, change… so why should it be any different for a company?

Your company needs to surround itself with others, establish agreements, and create joint projects that benefit both parties. Specifically in the automotive industry, strategic alliances can be an excellent way to leverage each company’s strengths to pave the way for new ways of doing things.

Just as you learned to build relationships in each interaction, we will provide the foundations for your company to start building its network of alliances with these steps:

1. Every interaction is a new opportunity; you just need to know how to identify them.

The first thing you should do to initiate an alliance is to sharpen your senses and those of your team to identify opportunities. As a starting point, you can analyze the industry and identify: competing companies (with strengths and weaknesses), companies that complement your business (if you sell cars, you can partner with a workshop), and industry authorities (influencers, specialists, leading companies).

In the automotive industry, some common opportunities for strategic alliances can include:

  • Development of new products or services: Your company can collaborate with another to develop new products or services that they couldn’t create on their own. For example, an automotive company could collaborate with a technology company to develop an autonomous driving system.
  • Brand positioning: Your automotive company can also collaborate, for example, with an urban artist to create a graffiti-painted car, making it unique and achieving brand positioning, as happened with the Colombian artist Viviana Grondona with Renting Colombia or Mini Cooper.
Form Strategic Alliances in the Automotive Industry - Keybe KB:

Alliances don’t necessarily have to be with someone in the same industry.

  • Efficiency improvement: For example, a car dealership could collaborate with a logistics company to improve the management of its supply chain, or with a specialized technology company in sales, like Keybe, which can make your sales team four times more efficient than it currently is.
  • Expansion into new markets: A car brand could collaborate with a dealership to offer its products in a city/country where it doesn’t have a presence yet.

2. Carefully evaluate who could be potential partners for your company.

Once you have a clear understanding of your possibilities, it’s time to evaluate potential partners. This is a very important step because you will be working with these people with a common goal, so you must feel a connection with them and the purpose, in addition to having the intelligence to know your weaknesses and find people who complement the process.

You can do this by considering the following factors:

  • Competencies and experience: Potential partners should have the necessary skills and experience to contribute to the success of the alliance. If you have excellent cars but your company needs to increase sales, look for partners who are experts in the field, with an admirable sales team and a marketing force from which you can learn and benefit.
  • Culture and values: Ideally, your allies should have aligned cultures and values to ensure smooth operation of the alliance. Sometimes these terms, perhaps more personal, can be an obstacle in the development of the strategy.
  • Objectives and goals: You can’t aim to increase sports car sales if you have a partner who wants to focus on selling family cars. These are very different things, and at some point, they will want to prioritize their objective over the other’s. Make sure your alliance is willing to follow the same direction.

3. Negotiate the terms of the alliance.

Once you have a clear picture of your partners, it’s time to negotiate and establish the terms of the alliance. We advise you to follow this structure:

  • Objectives: It’s important that partners have a clear understanding of the goal so that no effort deviates from the action plan.
  • Contributions from each partner: Each party should contribute to the alliance with their own skills and resources, and this should be clear from the beginning.
  • Rewards for each partner: Each party should benefit from the alliance based on their contribution, and this is the most important thing to establish to avoid misunderstandings in the future.
  • Conflict resolution: It’s important to agree on a process for resolving conflicts that may arise during the duration of the alliance. We know you’re professional, and the people you work with are likely professionals too, but everyone looks out for their company’s interests, which is why it’s necessary.
Form Strategic Alliances in the Automotive Industry - Keybe KB:

4. Implement the alliance.

Once the alliance terms have been agreed upon, it’s necessary to implement it. This includes developing an action plan to carry out the alliance and assigning responsibilities to each partner.

5. Monitor performance.

With everything in place and running, the final step is to monitor the alliance’s progress toward the agreed-upon objectives. Periodically, it’s necessary to collect data, analyze, evaluate, and make adjustments if something isn’t going as it should.

Knowing all of this, now let’s talk about certain considerations that are specific to the automotive industry and can be valuable alliances for your company:

  • Technology: This is a key factor in car sales. Seek alliances that help your company learn about and access new technologies that accelerate the development of new innovations, whether in the way you sell, the cars you sell, or the services you provide.
  • Regulation: The automotive industry is subject to a wide range of regulations, and sometimes compliance is costly and requires valuable human talent. Seek alliances that can assist with this. For example, if your company needs an accountant, find an excellent one and offer a mechanic at their disposal when needed, free of charge.
  • Supply chain: Through an alliance, you can make your company more efficient in its supply chain and reduce costs.

Building alliances in this industry not only drives growth but also fosters innovation and access to shared resources. By identifying opportunities, establishing strong relationships, and working together toward common goals, we assure you a more promising future than you could expect on your own.

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